Generation Rent wants unlimited tenancies and no sales of rental properties to FTBs

by Appalled Landlord

9:40 AM, 18th July 2018
About 4 months ago

Generation Rent wants unlimited tenancies and no sales of rental properties to FTBs

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Generation Rent wants unlimited tenancies and no sales of rental properties to FTBs

Dan Wilson Craw, director of Generation Rent, had an article in CityMetric, “an arm of the New Statesman”, last week entitled “Here’s why government plans for longer tenancies don’t go far enough”.

Now that Craw has seen the reduction in the number of rental properties as landlords have left the market, because of S24 and other attacks, he wants to ban the sale of rental properties to first time buyers or any other owner-occupiers (except for sales to sitting tenants – which is pure fantasy).

The article starts with “When the modern private rental market was devised as part of the 1988 Housing Act, flexibility was the theme. If a landlord decided they no longer wanted to be a landlord, then they could use Section 21 of the Act to evict their tenants with two months’ notice, with no reason necessary, and cash in their investment.”

After criticising the Deregulation Act 2015 which made revenge evictions illegal he continued with:

“Last week the government published its long-awaited consultation on longer tenancies.  It proposes to replace the 1988 model with three-year tenancies, retaining the ability of the tenant to move out after six months, but the government has undermined this progress by letting amateur landlords keep their flexibility, allowing them to take back a property in the three years if they want to sell or move back in. According to last year’s EHS, 63% of private sector evictions take place for these reasons.

“A three-year tenancy with limited grounds for eviction should at least give tenants greater confidence to complain, but that’s not enough. They should also have the knowledge that, so long as they meet their legal obligations, the home is theirs. If landlords can evict a blameless tenant, the rental market will keep failing to provide the certainty we associate with home.

Ending Section 21 would still allow evictions if a tenant breaks the contract. If a landlord wants to sell, that’s fine, but they should sell to another landlord, with the tenants staying put – or to the tenants themselves. If they want somewhere to live, they can rent.”

If Section 21 were abolished, all tenancies would become periodic at the end of the initial period – whether this was 6 months or 3 years – and the landlord would not be able to evict the tenant except for rent arrears or other breach of contract.  So an owner who moved away for a short-term work contract and let his or her home might never be allowed back in and might have a sitting tenant for life.  And all landlords might have to sell with a sitting tenant.

Ending Section 21 would create lifetime tenancies again.  It could just be the last straw that drives landlords out of the market.  It would remove their right to deal with their properties as they wished.  Allowing themselves to be stuck with a sitting tenant would reduce the value of their property, just as it did in most of the last century.  So landlords are more likely to evict their tenants before this right was removed, and sell with vacant possession, or simply leave them empty if there were no mortgage to pay.

The fact that his bright ideas would further reduce the number of existing rental properties and further deter the supply of new ones does not seem to have occurred to Craw.  He is campaigning to reduce supply and increase rents.  Brilliant!

In November 2016 Craw was unconcerned about Section 24.  He was on the Eddie Nestor radio programme as Generation Rent’s Policy and Communications Manager.

Eddie had put it to him that if landlords’ costs are increased through Osborne’s levy on mortgage interest under Section 24, those who ”stay in the game” will just pass them on to people who rent.

DWC said: “Well, the rents that we are paying at the moment are set by the excessive demand compared to under-supply of of homes, so landlords are already charging as much as they can get away with so if they tried to charge anything more then you’d probably find that there’s other landlords who can charge less and and tenants can just decide to move and find a landlord who doesn’t have a mortgage to pay and in fact as you mentioned with the Treasury statement that the majority of landlords aren’t actually affected by these changes.”

It sounded, painfully, as if this was the first time he had thought about the levy being passed on to the end-user – just like every other tax is.

It was as sensible and coherent as Natalie “Brainfade” Bennett announcing the Green Party’s attack on landlords’ mortgage interest in their 2015 manifesto, which Osborne introduced a few weeks later.

https://www.youtube.com/watch?v=TCH7WgxT2yI People were still commenting under this two weeks ago.

Osborne, a man who rose without trace, famously could not multiply 7 by 8.

https://www.youtube.com/watch?v=zOGMCRDOEB8

The moral is that you don’t have to be clever to be a disrupter, in fact being clever is probably a deterrent.  They all seem incapable of seeing the harm that their actions would cause, like a stupid child who pokes a stick into a bees’ nest.



Comments

David Lawrenson

11:42 AM, 18th July 2018
About 4 months ago

Simply amazing isn't it.
This chap needs to go back to page 1 of any economic text book and read about demand and supply.
And also read some economic history to see what happened last time the PRS was so restricted. Welcome back Rachman!
PS Well done Property118 for your assessment of the loony "Onward" report by the Conservative group led by the clueless Neil O Brien MP
David Lawrenson
http://www.LettingFocus.com
PRS consultancy

David Lawrenson

12:21 PM, 18th July 2018
About 4 months ago

Generation Rent previously had interesting sponsors in the form of Nationwide Foundation, who are related to the dear Nationwide building society.
I think the society became a bit embarrassed that some of the things Gen Rent called for were not in their interests.
Here is the link to my 2014 piece on this...
http://www.lettingfocus.com/blogs/2014/12/nationwide-foundation-generation-rent-odd-bed-fellows/

Whiteskifreak Surrey

14:47 PM, 18th July 2018
About 4 months ago

Honestly - who allows brains like that publishing anything, except on their FB page? Why the country has to put up with such idiocy?
"Ending Section 21 would still allow evictions if a tenant breaks the contract. If a landlord wants to sell, that’s fine, but they should sell to another landlord, with the tenants staying put – or to the tenants themselves. If they want somewhere to live, they can rent.” But it is not what idiot GO&Co wanted! They wanted to sell to FTB (pity it did not materialise... - but it is hardly a surprise.). The whole thing, like Brexshit is in shambles.

Devon Landlord

10:23 AM, 19th July 2018
About 4 months ago

To be frank, I am beginning (some would say only just realised it) to loose faith in Conservative policy regarding housing. Perhaps the people who write these 'desires' for housing equity have not heard of the law of unexpected consequences. Landlord power has shrunk over the last few years to an extent that many are reducing portfolios or giving up all together. The landlord is the one with the burden not the tenant. So many rules exist now that it is becoming more complicated to rent as a tenant and let as a landlord than ever before. Landlording is a business. We landlords know that. The Government still treats us as though it is not and the deeper the new tax initiatives on mortgage relief bite into small profit margins the greater the number of landlords who will find it impossible to continue providing homes for people. I have tenants who have been with me for years and all are on a statutory periodic basis after the initial six month AST. There is no problem with this for me or them. They are good people and I want them to stay. What I do not want is someone who abuses me and my property. I want a way to evict them in the most cost effective way. I do not want my whole portfolio profit going down the drain with no protection in a long winded and increasingly complicated eviction process.

It is about time the Conservative Government acted like conservatives and supported those who make provision to home those who can't or don't want to get on the property ladder themselves. The section 21 notice has proven its worth. Landlords do not use it willy-nilly. In running a business you want to keep your good customers (tenants) and you look after them. It is about time the powers that be started to look after those who do the looking after and stop putting stupid and ill conceived obstacles in their path.
The Government must reconsider the position they take regarding landlording as a legitimate business without going down the road of incorporation and reinstate tax relief on BTL mortgages. This will enable more landlords to stabilize rents and invest more into their properties and YES, make a profit! That is why business does things unless of course you want a corrupt non profit socialist strategy which ultimately will end in chaos and neglect. In this situation everyone is the looser.

David Lawrenson

10:38 AM, 19th July 2018
About 4 months ago

Reply to the comment left by Devon Landlord at 19/07/2018 - 10:23
Importantly the government also needs to realise that if they want the criminals posing as landlords out of the sector, they must properly resource the local authorities to police the sector and identify and route out the criminals.
The laws and powers are already there, but they are useless without people who can enforce them.

Gromit

11:07 AM, 19th July 2018
About 4 months ago

Reply to the comment left by Devon Landlord at 19/07/2018 - 10:23
Very succinctly put.

If you don't mind I'll send this to my local MP (Con.) although most Conservative MP are preoccupied with Brexit navel gazing.

DALE ROBERTS

22:28 PM, 19th July 2018
About 4 months ago

After the horror of "housing" a nightmare tenant who felt just as entitled to not pay rent, trash my property, ignore utility bills and scam benefits from the Council it has given me huge pleasure to refuse to tenant my property again. Especially as it took 8 horrible months to evict her - whilst she enjoyed all the protective legislation afforded her which she manipulated like the professional rogue tenant she was - aided and abetted by Council who advised her to await the Bailiffs. In other words a Section 21 is not a guarantee of getting a property back. It's merely the first attempt to do so but has no binding force. It can and is ignored by a tenant.
My property is now empty and pristine and will soon be sold.
I lost over GBP20 000.00 with this tenant but it resulted in her having a CCJ registered against her, a termination of her benefits payments and, hopefully, no chance of her being able to scam a landlord again. She really should be in jail for deliberate theft.
Dan Wilson Craw and his ilk are the drivers behind the slew of discriminatory regulations against private landlords and therefore the drivers behind the hardening of attitudes by private landlords.
The only losers are tenants.
I'm astounded Dan cannot figure this out himself but then again ....

David Lawrenson

7:59 AM, 20th July 2018
About 4 months ago

Reply to the comment left by DALE ROBERTS at 19/07/2018 - 22:28
Quite!
The TV programme, "Nightmare Tenants Slum Landlords" should be compulsory viewing for the likes of Dan Craw and Neil O Brien MP. And they should be forced not to skip the Nightmare Tenant parts. Also, a training week with Paul Shamplina and Ben Reeve Lewis and me to see the reality on the ground of how the private rented sector really works - and which parts do not. Then force them to pledge to put in place proper policy and resources that will work in the PRS, not designed to win votes from the dull and disinterested.
And please end this endless attempts to please the likes of Tory backers, Aviva, L&G and the other Build to Rent corporates at the expense of the small landlords.
David Lawrenson
http://www.LettingFocus.com
PRS Advice and Consulting

Gromit

8:05 AM, 20th July 2018
About 4 months ago

Reply to the comment left by David Lawrenson at 20/07/2018 - 07:59
"......... likes of Tory backers, Aviva, L&G and the other Build to Rent corporates................"

but it is these who swell Tory coffers, and more importantly hand out fat-salaried, non-exec Directorships when a Minister leaves power.
That's also why most MPs toe the line and not rock the Tory boat as it jeopardises their chances of getting a ministerial job.

Simon Williams

22:44 PM, 21st July 2018
About 4 months ago

As well as being a stupid idea on economic grounds, any proposal to restrict sales of rental properties in the way proposed is highly likely to fail on legal grounds. The European Convention on Human Rights guarantees the right to freedom of personal property - and disposal has been held to be a fundamental aspect of that right. If the State was to impose a huge disposal restriction that was almost certain substantially to devalue the asset in question, it would likely need to grant compensation and the whole law may fail in any event on proportionality grounds. There are likely to be fundamental arguments around retrospectivity too, if the law was to apply to properties purchased before any such law was enacted. We do need to take seriously the rantings of these "teenage scribblers" because their ideas are often picked up by the Labour party, but this is one idea that would not survive 10 minutes of civil service scrutiny.

There is a distinction, by the way, with the law which requires selling freeholders to offer first refusal to leaseholders. In that case, the leaseholder must pay market value and if the leaseholder doesn't want to buy, the freeholder has complete freedom to sell to anyone else.

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