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9:36 AM, 4th March 2019, About 5 years ago 63
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I came across this posting on another forum and wanted to share it with P118.
“Sian Berry, The Green Party’s London Mayor candidate plans to introduce a right to buy for tenants. Sian Berry has been influential to Sadiq Khan, The London Mayor who has adopted Green policies and also Jeremy Corbyn so there is a risk this could become Labour policy.
I would encourage you to challenge them publicly on social media about it. They are responsive to adverse publicly and this needs to be nipped in the bud. Search on twitter @sianberry @sajeraj and @tom_chance
A Right to Buy and to Co-op for private renters
Dear All, this is based on the work Tom Chance and I did with Sian to produce this report: We’ll be consulting a number of housing organisations and other relevant parties on this as well.
Motion title – a private renter Right to Buy and Right to form a Housing Cooperative
Synopsis: Private renters are often left without control over their housing situations. This motion seeks to establish a Right to Buy for private renters and Right to form a Housing Cooperative in order to improve the control, conditions and finances of private renters.
Motion text:
Private renters in a house of multiple occupancy (HMO) will have the right to form a cooperative in order to exercise a right to buy from a private landlord. They would receive a discount on the cost of the home that would be paid out of the landlord’s capital gain. Renters would also have the option of contracting with an existing housing co-operative to manage their home. Tenants that chose the co-op option would still be protected by the same tenancy provisions, including secure tenancies and rent controls.
Cooperatives will be provided 5-year loans to help co-ops buy properties. After those 5 years the co-op would have gained sufficient equity in the property, and have a financial track record, to be able to secure better deals from ethical and other lenders. Loan and grant funding will be provided for property improvements and extensions. A Green government would also work with existing housing co-operatives in London to leverage their asset base and their cash holdings to support new co-operatives.
Private renters will have a Right to Buy their home from their private landlord. They would receive a discount on the cost of the home that would be paid out of the landlord’s capital gain. The price the renters buy at should not be less than the original price the landlord paid plus expenditure on subsequent improvements and inflation (CPI), so that no landlord can make a loss. Landlords with between one and three properties should also be entitled to financial advice including an assessment of their options to achieve income or capital growth in more socially productive investments. The Right to Buy would be limited to homes that are at least 25 years old, to avoid deterring investment in new build properties. Homes bought through this mechanism will have a covenant applied restricting the resale price to the original price paid plus inflation (CPI) to preserve future affordability.”
My initial thoughts are (after “OMG, FFS!”)
– “left without control over their housing situations” – except for minimum 2 month’s notice, no retaliatory evictions, able to reclaim rent & deposit and sue LL if they cock up, free legal advice at court, HHRS, compliance with licensing regs etc etc
– HMOs tend to have more transient tenants by nature – why would they buy? What happens if one “owner” wishes to move on? Will other tenants be obliged to buy them out? If so, who’s going to fund that? What happens in a falling market?
– What would happen in a HMO with say 6 tenants, 5 of whom want to buy but the 6th doesn’t? Will they evict the 6th tenant or buy as a group of 5, thus making the 6th tenant a lodger? Will lodger’s have a right to buy?
– Why should LLs take the risks, finance the properties/maintenance/refurbs, save for the initial investment with the aim of making a living, only to hand over the profit to people who have taken no risks or made the sacrifices to save for the investment?
– How will they balance the loss of revenue to HMRC for reduced CGT and Income Tax on rental profits?
– Para 2 infers that they will bring in secure tenancies and rent controls which will mean more LLs leaving the market and higher rents.
– Who will fund these 5 year loans? Taxpayers? How will the Treasury do this out of reduced receipts? Who’s paying the legal & SDLT or will that be covered by taxpayers too?
– Their assumption that the property would gain sufficient equity in 5 years shows their total lack of understanding of property. After 10 years, some areas in the UK have not got back to pre-crash levels. What happens if the tenants default on their mortgage – how will the lenders feel about pursuing 4,5,6+ mortgagees? Who do they expect will pay for loan & grant funding for property improvements and extensions? Will every home owner in the country be eligible for these loans, or only those in a HMO Co-Op?
– The 5 yr initial mortgage for this RTB would have horrendously high repayments – especially in London/SE – where many HMO Tenants may well be claiming LHA – hence any repayments would need to derive from net earned income – whilst also satisfying the strict MMR lending criteria.
– They state we would get PP + improvements + inflation so we don’t make a loss – but why would anyone become a LL to just break even?
– Fab! We can get financial advice on how to achieve income or capital growth in more socially productive investments. But they don’t say this will be free financial advice (nor what they consider profit-making socially productive investments).
– The majority of homes in this country are over 25 years old. It will deter investment in new builds as no LL will invest. And what about all the hundreds of Rent to Buy apartments that are springing up all over the country?
– Does the R2B means that tenants can force the sale of a property without the LLs consent? Can the LL evict tenants to prevent the forced sale? Or evict them so he can sell on the open market (perhaps giving tenants first refusal)?
– Compulsory R2B would mean the mortgage market drying up as lenders won’t want to take the risk of a LL having their property effectively confiscated. This would cause a market crash and another recession.
– As someone else has pointed out: There will be a form of securitisation from collectives’ loans. So as Lehman Brothers proved so successfully lending millions of loans to uncreditworthy people does not give you a credit worthy product. What it does do is allow you to slice and dice the risk better. But who takes the last tranche? Would tax payers?
– This is an asset-grab for political gain and nationalisation by the back door.
Heather
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Does the section 20 have a time limit?
Mandy Thomson
18:04 PM, 13th March 2019, About 5 years ago
Reply to the comment left by Mark Alexander at 13/03/2019 - 17:25
So are bluebottles.
Tim C
23:24 PM, 13th March 2019, About 5 years ago
I love the watermelon analogy. Sums up the usual half baked Green policy!
Greens are far worse than Labour!
As usual shows a complete lack of understanding of property nuances and issues faced by those of us not blessed with the price escalators of London and the SE! I would assume this would also be retroactive as with cl24 so completely ignoring any re financing and CGT obligations too. Hey why not finally bankrupt the LL at the end as I'm sure that would play out nicely to generation rent et al for his misdemeanors!
Ironically this policy may actually help me as part of my portfolio is in an area which has fallen in value so it would be nice to get the original PP back and money for the endless repairs when tenants trash the property during, or at the end of the tenancy!
Green policy should be to support the private LL and encourage investment in improvements as we provide a vital role in the community not to mention all the work provided to local trades etc.
Why can't we applaude the hard working individual that wants to better themself, instead of trying to pull anyone down who has the guts to do something different? Sad, sad place the UK has become!
Freda Blogs
23:41 PM, 13th March 2019, About 5 years ago
For many of us, these properties are our pension pots. We have invested in property to provide for our future.
Now imagine if we hadn’t bought property, and the money invested was sitting in a fund somewhere and a person from the government demanded without good reason that we hand over a chunk of our pension pot to some other people.
Would that be allowed? No, there would be outrage at a scam in which people were deprived of their hard earned pensions by unscrupulous individuals. Their money was stolen.
We wouldn’t allow that to happen, would we. But where’s the difference here? It’s theft, misappropriation of funds. It is inconceivable that anyone could have come up with such a ridiculous idea...
Freda Blogs
8:07 AM, 14th March 2019, About 5 years ago
Here's another good reason which it shouldn't happen (and a significant contributor to the housing crisis).
BBC article published today on Right to Buy profiteering.
https://www.bbc.co.uk/news/uk-47443183
TheMaluka
8:15 AM, 14th March 2019, About 5 years ago
Reply to the comment left by Freda Blogs at 14/03/2019 - 08:07
Everyone cares about individuals profiting at public expense but regretfully no one cares about landlords losing - except perhaps the individul landlords!
Mandy Thomson
9:07 AM, 14th March 2019, About 5 years ago
No doubt we'll see a poacher turned game keeper scenario in the future when those who would acquire property under PRS Right to Buy are in turn deprived of their property by some money grabbing future government!
Mike
19:51 PM, 14th March 2019, About 5 years ago
Actually there would be no problem if a tenant exercised his right to buy, but at the market value, if a landlord was forced to sell a property through laws, then that sale price should not be liable to any capital gains tax either, so that might be such a good idea after all, we landlords can then give our tenants half a carrot to go for it, so when we are forced to sell our property at the prevailing market prices, we can possibly benefit out of it by not having to pay any capital gains, so we could offer tenants a quarter or may be just a small bite of our carrot, Note MPs we are not daft like you lot who cannot even work out how to seperate from EU.
But to say we will be forced sell it at knock down price just a little over what we paid for it, NO BLOODY WAY!
Tim C
21:02 PM, 14th March 2019, About 5 years ago
Seeing as many of us have put everything into buying and managing property over the years to be productive and self sufficient in old age at the expense of other pension arrangments. Would it not be fair with those with gold plated government pension schemes also give these up to be more socially productive? Lets level the playing field for those of us relying on property for our pension!
Mike
22:09 PM, 14th March 2019, About 5 years ago
Changing the subject slightly, the whole point of leaving the EU is to be totally independent nation, you cannot have your cake and eat it, the whole point of joining the Eu in the first place was to have no hurdles in the free trade and movement of goods and people, with a cost, that we contribute to EU budget and be subjected to common rules applicable to all member states. So now what we are asking EU is that we don't want their people coming over freely, but we want to send our exports to them duty free! and we want no hurdles to our goods and possibly we don't want hurdles to our people moving out to EU countries, ha ha, you would be most foolish if you ever thought you could have your cake and eat it! Same rules apply to Landlords and renting, for too long our Government has been sneaking in and eating our cake, they don't deserve, so hands off landlords, we will stand up and rise, and fight back, mark my word now, there will not be any deal with EU no matter what, it is common sense, why should there be any deal, when you are no longer going to be part of EU, so delaying Brexit is quite foolish, time wasting , either you leave EU without any deal which is what is going to happen, and stop dreaming EU will let you have your cake and eat it, EU are not Landlords! Dear Ministers, you can take the piss out of landlords but you certainly will not be able to take the piss out of EU. Dear Mr Corbyn, what magic wand have you got in your sleeve?
Mike
22:35 PM, 14th March 2019, About 5 years ago
Mr Corbyn's magic wand is Britain will still be part of EU, it will pay full budget to EU, and pretend that we are no longer part of the EU on paper only, in reality or in practice everything will still be as before, the British public won't be able to tell the difference, so we sign this new deal today and tear out old papers, we exit EU on paper only. Yes MR Corbyn, you have good plans, let us tell the Public we have exited EU, so you are on Mr Corbyn, you have the right idea, if we can't get it our way, we must get it some other way even if it means bluffing the British Public, so let us sign a fake deal with EU. We can fool the British Public, we can tell them these EU migrant workers are still coming because we need them, because they are essential to our trade and industry and our farming and our construction industry. They are allowed to come under a special work permit system, they are needed because we do not have our own workers wanting to pick fruits and veg and supply farming labour, because our generation now all attend schools and achieving high grades, and all going to universities, when they come out of unis, they want decent high paid jobs, no one from Britain wants pick cauliflowers, and no one from our new generation of students we are churning out of unis wants to work on a car production lines, do manual work, so we have these essential workers from EU, and many visit us here for holidays, so fool the public that we have left EU, but have we we really Mr Corbyn? so Mr Corbyn thinks he can sign a deal with EU! shall we give him a chance?
Funny thing is we still want to be part of NATO.
The say "You can't have your cake and eat it" couldn't have been invented for nothing .