Generation Rent wants the Government to force landlords to accept more risk

Generation Rent wants the Government to force landlords to accept more risk

17:17 PM, 1st June 2021, About 5 months ago 40

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Many people will have heard on the radio over the Bank Holiday weekend reports about the eviction ban ending. A Joseph Rowntree Trust claim that 800,000 households face losing their homes was repeated throughout the day. Not once did Radio 4 or Times Radio mention rent arrears. Not once did they say that many landlords have received no rent for months and in some cases are themselves in financial difficulties because of that.

No landlords were interviewed. Nobody made the obvious point that, in the current climate, sensible landlords won’t evict without good reason and also that they still need to give four months’ notice under s21 so (law of unintended consequences at work) it is logical and prudent to s21 serve notices now just in case.

This morning (1st June 2021) Radio 4’s Today Programme. (I have listened again on the Sounds App to ensure I heard correctly) was enlightening. For a piece about landlords asking for six months’ rent in advance, they interviewed Dan Wilson Craw (DWC) of Generation Rent. The programme host, to be fair, did suggest there might be a backlash by landlords because of the eviction ban. Some landlords having had a bad experience of not being paid took rent upfront to provide some security. Too right.

DWC’s immediate response was to complain about landlords “wanting to avoid risk”. He criticised us for filtering out tenants on benefits and for “wanting to screen out those who [we] think may not be able to afford [the rent] in future”.  Guilty as charged, m’lud. If a prospective tenant looks as if they can’t pay the rent, I don’t want him or her especially if I have to wait for months of arrears to accumulate.

DWC’s proposal was, and I quote: “The Government needs to give tenants more options and force landlords to take on ..er.. accept more risk”.  Well, at least that is clear. Landlords, as distinct from other businesses, must be compelled to act imprudently. Having been stung already, we should take on more risk. There was no acknowledgement by DWC that landlords who are thousands of pounds out of pocket can’t be expected to act as if nothing had happened. We are just involuntary creditors to be treated as milch cows.

What happens when businesses are required to accept more risk? Well it often ends badly. Remember the sub-prime loan crisis made much worse when left-wing politicians pressured banks to lend to people with bad credit histories. Many people lost their homes and some were bankrupted.

I hope that politicians are listening. If they expect landlords to take more risk then rents will have to go up to compensate for increased defaults. More defaults and landlords will obtain more County Court judgments. More tenants will have credit scores ruined, making it harder than ever for them to buy a house.

 

If Generation Rent have their wish I predict rents will go up, more tenants will default. More CCJs, more misery all round. Not a great policy. A modicum of analysis would show it is unsustainable. Generation Rent don’t seem to realise that they will hurt the people they profess to support. If DWC or anyone else at GR would care to comment on this board, please do so.



Comments

by Ingrid Bacsa

10:15 AM, 17th June 2021, About 4 months ago

Rent out in a different way:

Rooms with an appointed live in landlord sharing the house, then, if dont pay - they HAVE to go . They are lodgers or unoccupied tenants.

Let the Council take responsibility for needy families. They maintain the power no matter what, so why.not let them maintain the responsibility. Don't risk losing access to your house and losing your credit rating as well.

by Chris @ Possession Friend

10:41 AM, 17th June 2021, About 4 months ago

Reply to the comment left by Ingrid Bacsa at 17/06/2021 - 10:15
As far as difficulties tenants will face as a direct consequence of govt action , much encouraged by so-called Tenant support groups, is not the moral or financial responsibility of Private Landlords.
You reap what you sow.

by Ian Narbeth

10:51 AM, 17th June 2021, About 4 months ago

Reply to the comment left by Ingrid Bacsa at 17/06/2021 - 10:15"Rooms with an appointed live in landlord sharing the house, then, if dont pay - they HAVE to go . They are lodgers or unoccupied tenants."
Ingrid, if only it were that simple! It isn't.
What you are proposing will be viewed as a sham by the court. Q What is "an appointed live in landlord"? A The real landlord's patsy and not a true landlord. On what basis will that person be occupying the property? Under a tenancy? Without a tenancy? If the former then they are not the landlord. If the latter, then one would be a fool to let them take occupation.
The courts are very likely to find that all occupiers are tenants with all that status entails.

by silversurfer2017

10:55 AM, 17th June 2021, About 4 months ago

Reply to the comment left by Ingrid Bacsa at 17/06/2021 - 10:04
Nobody in their right mind but want to live long term in a holiday let. Holiday let rates are often at least 3 times the AST rates. In any case why complicate a business model that works well.
The other model which avoids AST lettings is to do a company let to a company which provides serviced apartments (or sometimes houses) to business users or holiday makers depending on your area. Go to the ASAP website which show companies which operate in your area. ASAP = Association of Serviced Apartments Providers

by Ingrid Bacsa

21:53 PM, 20th June 2021, About 4 months ago

Reply to the comment left by Ian Narbeth at 17/06/2021 - 10:51
Ian, Its very simple to ensure "lodger" status as opposed to Assured Shorthold Tenancy status..

A live in landlord will manage the shared accommodation. The kitchen will be shared. It will not be bedsits, just bedrooms.. The living room will be the live-in landlord's space; he will share it. Each tenant will then sign a "Lodger's Agreement" as an unoccupied tenant.

The "Lodger" Agreement having been issued individually, agreed and signed by the "Lodger" and the "live in landlord", cannot possibly pass as an assured shorthold tenancy. The live in Landlord can also have an agreement with the owner, to sublet to lodgers . You will be His Landlord, he will be their Landlord.

I have been a live in landlord myself for many years but wouldnt hesitate to engage someone I trust to do the job for me if I relocate. ( I would want my house back at some point).

Am I missing something here?

by Ingrid Bacsa

21:56 PM, 20th June 2021, About 4 months ago

Reply to the comment left by at 17/06/2021 - 10:55
Thanks, I've noted that. However I know someone who does renewable holiday lets for long periods. I would assume she charges less than the expected price. She is very successful, and is never stuck with someone who wont go.

by silversurfer2017

7:32 AM, 21st June 2021, About 4 months ago

Reply to the comment left by Ingrid Bacsa at 20/06/2021 - 21:56
It would be interesting to enquire whether she declares this income to HMRC. Does he/she use the section of the property pages for AST type tenancies or the section for holiday lets? If you look at HS253 it is clearly not a holiday let. It will not attract the lower 10% rate of CGT and any loan interest will not be fully tax deductible.
---------------------------------------------------------------------------
The letting condition
You must let the property commercially as furnished holiday accommodation to the public for at least 105 days in the year (70 days for the tax year 2011 to 2012 and earlier).

Do not count any days when you let the property to friends or relatives at zero or reduced rates as this is not a commercial let.

Do not count longer-term lets of more than 31 days, unless the 31 days is exceeded because something unforeseen happens. For example, if the holidaymaker either:

falls ill or has an accident, and cannot leave on time
has to extend their holiday due to a delayed flight

by Ian Narbeth

10:28 AM, 21st June 2021, About 4 months ago

Reply to the comment left by Ingrid Bacsa at 20/06/2021 - 21:53
Ingrid, we seem to be at cross-purposes. You said: "Rent out in a different way" and referred to an "appointed live in landlord". If what you mean is that you yourself let out part of the property you live in, then, yes, you can take in lodgers. However, it is misleading to describe this as a different way of renting out since the professional landlord can only live in one house at a time and may not want to take in lodgers.

Furthermore, if someone chooses to become a live-in landlord, they are not "appointed". It is very odd to suggest that they appoint themself!

by Mike D

10:45 AM, 29th June 2021, About 4 months ago

Rents are rising anyway as demand increases. I had 23 respondents for a recent flat, and the market has gone up by over 6% in the last 12m.
Legislation is driving up costs and rents, the government is protecting tenants at a massive cost to tenants themselves....
This is a massive own goal started by George Osborne

by Mick Roberts

12:25 PM, 29th June 2021, About 4 months ago

Reply to the comment left by Mike D at 29/06/2021 - 10:45
Great words Mike D:

Legislation is driving up costs and rents, the government is protecting tenants at a massive cost to tenants themselves....
This is a massive own goal started by George Osborne


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