Fair Rents (Scotland) Bill or Artificial state manipulation of free market rent?10:34 AM, 6th November 2020
About 4 weeks ago 36
The Land for the Many report for the Labour Party was released on 4 June. Click here
George Monbiot was the editor and there were six other authors. One of them, Beth Stratford, wrote an article about it in CityMetric. Click here
Paragraph 6 of her article reads “We recommend measures to reduce the exploitation and insecurity in the private rented sector – reforms that make sense on their own terms, but have the added benefit of dampening demand from Buy-To-Let landlords.
The link takes you to a section of the report headed “Reform of the private rented sector”. This claims that “Measures to end the insecurity and exploitation experienced by private renters make sense on their own terms, as the constant threat of rent hikes and evictions is affecting the health, relationships and life chances of millions of people. ”
Shelter is the source for this claim. Firstly, footnote 85 reads ”Evictions are the number one cause of homelessness. Shelter, 2017. Eviction from a Private Tenancy Accounts for 78% of the Rise in Homelessness since 2011. Press Release, March 23, 2017.” [Except that termination is not a cause, click here ] and, as Shelter subsequently admitted: “The inability to find a new place to live once a short term tenancy ends is a leading cause of homelessness in Great Britain.” Click here ]
Secondly, footnote 86 reads “Even for those unlikely to be made homeless, the threat of eviction can mean constant anxiety and insecurity. Shelter, 2017. Unsettled and Insecure: The Toll Insecure Private Renting Is Taking on English Families”. [The basis for the claim of millions of people is “a survey of 817 Private renters in England with children in household”. It is not clear why those who are unlikely to be made homeless should have constant anxiety and insecurity over the threat of eviction.]
The Land for the Many report mentions Theresa May’s proposed abolition of Section 21 and John Healey’s call for caps on rent increases, but the authors want more:
“We further recommend that the permitted grounds for eviction within the first three years of a tenancy should be more limited than they are under the reformed system in Scotland, excluding, for instance, a right to repossess the property in order to sell or renovate. (Emphasis changed)
Footnote 90 reads: ”As a recent IPPR report notes, 62 per cent of no fault evictions are served to enable landlords to sell their property or to use the property themselves. This additional protection would not prevent landlords from selling their property with sitting tenants. See D. Baxter and L. Murphy, 2019. Sign on the dotted line? A new rental contract. IPPR.”
[Baxter and Murphy’s report, courtesy of Nationwide Building Society (not the Nationwide Foundation), says: “Improving security for tenants: Government should introduce a mandatory open-ended tenancy, ending section 21 (no-fault eviction), removing selling a property as a ground for eviction in the first three years of a contract and limiting rent increases to once a year, capping them in line with the consumer price index.” (Emphasis added) Click here ]
But even that is not enough. The Land for the Many report goes on:
“We recommend increased eviction notice periods. Two fifths of private tenants (41%) report that the current two-month notice period is too short to allow them to find a new place to live.[Except that only 18% said it was definitely too short, and 24% said it was possibly too short – paragraph 3.9 Click here ] We also propose compensation (equivalent to three months rent) for tenants who are forced to move through no fault of their own. This would incentivise landlords to sell to sitting tenants or sell the property as tenanted to another landlord where possible. It is paramount that such protections are in place before any broader housing market changes are enacted that could trigger landlords to sell. (Emphasis changed).
There is no footnote to support the second part of this recommendation, but I recognise the source: Dan Wilson Craw, the director of Generation Rent, who is mentioned in the Acknowledgements. He wants landlords to give six months notice if selling, and refund three months’ rent. Click here
In summary, all they are asking for is lifetime tenancies, rent caps, no sale in first 3 years of a tenancy except with sitting tenants (at below market value therefore) and six months’ notice from landlords, three of them rent-free.
They want these changes to be enacted first in order to trap landlords in the PRS before tax changes are brought in that will make them wish they had sold when they had the chance.
The people and organisations mentioned above think that the changes they demand would help tenants, by making the PRS fairer. Beth Stratford claims they “have the added benefit of dampening demand from Buy-To-Let landlords.”
She may be unaware that demand from Buy-To-Let landlords has already been dampened by George Osborne’s lunatic tax on mortgage interest and other finance costs, and that the PRS is already shrinking for the same reason and consequently the cost of temporary accommodation is ballooning.
These people lack the wisdom, knowledge and experience to realise that the mere threat of these changes would drive even more landlords out of the market, reducing supply and making the poorest tenants homeless. The latter would have more to worry about than whether their children will need to change school. Brilliant! Well done, all of you, not forgetting Nationwide Building Society!
Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.
Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agentsLearn More