Land for the Many but Rentals for the Few

by Appalled Landlord

10:25 AM, 7th June 2019
About 2 weeks ago

Land for the Many but Rentals for the Few

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Land for the Many but Rentals for the Few

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.[85][86] ”

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[89], excluding, for instance, a right to repossess the property in order to sell or renovate.[90]  (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.[91][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!



Comments

Paul Essex

13:11 PM, 9th June 2019
About A week ago

Reply to the comment left by Luke P at 09/06/2019 - 12:29
There are a couple of key questions here that I have not seen addressed.
1. Am I correct in assuming that a tax would not be a business expense so we would need to pay it out of profits rather than income?
2. For a Tennant paying council tax there may be little overall difference in cost. However for currently exempt tenants, i.e. most DSS and students there could be huge jumps on rent as us landlords would not be exempt from the 'property owning tax'. If my understanding is correct it would be another reason to be wary of taking on any exempt tenants.

Mick Roberts

15:41 PM, 9th June 2019
About A week ago

Reply to the comment left by Luke P at 09/06/2019 - 12:29Nuts aren't they.
If a Landlord is only making £50pm, & that goes on maintenance at end of year, where do they think the money is coming from?
Except this time, there will be admin/time charges to pay for. And we all know how hard it is for Landlords to deal with Council Tax departments & actually pay & we can't even get that done.
Is someone gonna' teach these boffins one day, look at all the charges & attacks they've done on Landlords, rents are rocketing to pay for it, surprises me how much rents are when I look as to make sure I'm not charging mine too much, & I'm normally way cheaper cause all these other Landlords have to pay for the outgoings.
U bash the Landlord, u hurt the tenant.

Appalled Landlord

21:52 PM, 9th June 2019
About A week ago

Reply to the comment left by Cathie Hawkins at 07/06/2019 - 21:37
Hi Cathie

The Telegraph had a scathing article by Jill Kirby, which included:

“Instead of considering the obvious causes of pressure on housing in the most overcrowded parts of Britain – such as the huge increase in immigration triggered by the last Labour government – Monbiot and his co-authors fall back on the old Left wing sentiments of envy and spite.”

“Determined to crush any financial return on owning a property, Labour also has private landlords in its sights. The report describes the private letting market as a “buy-to-let frenzy” and proposes “open-ended” tenancies, with caps on permissible rent increases. Not only would this remove the incentive to let out a property , it would also create significant risks to landlords of being able to reclaim their property in the future, effectively handing control to the tenant.
Closing down the private rental market in this way would of course mean that everyone unable or unwilling to commit to buying a home would lose their access to privately rented property, a prospect that apparently does not trouble the writers of this report. They seem confident that the state would be able to take over enough land to supply social housing for all at public expense.”
https://www.telegraph.co.uk/news/2019/06/04/labour-has-shown-wants-nothing-less-abolition-private-property/

John Trickett MP, the man who commissioned the report, complained that there was no mention of it at all in the broadcast media.
https://tribunemag.co.uk/2019/06/land-for-the-many

The editor of the report was George Monbiot, a Guardian columnist. He had an article about it, of course. https://www.theguardian.com/commentisfree/2019/jun/04/tackle-inequality-land-ownership-laws

But another article in the Guardian was neutral, just reporting its existence without any endorsement, not even faint praise.
https://www.theguardian.com/business/2019/jun/03/labour-could-speed-up-plans-to-reveal-details-of-uk-property-owners

In the Times Philip Collins was supportive, but complained that the report “where it was not ignored, was greeted as evidence of Labour’s desire to tax the nation until the pips squeak.”

“Nevertheless, there are some serious proposals in the report and they deserve better than the alternating silence and scorn with which they have been greeted.”
https://www.thetimes.co.uk/edition/comment/a-land-tax-can-be-fertile-ground-for-labour-3rkb8kkfj?utm_source=newsletter&utm_campaign=newsletter_119&utm_medium=email&utm_content=119_6244297&CMP=TNLEmail_118918_6244297_119  

Silence and scorn. Not what you would call a media success.

Chris Daniel

8:34 AM, 10th June 2019
About A week ago

Reply to the comment left by Rob Thomas at 07/06/2019 - 14:53
Absolutely Right Rob,
One way to increase the Landlords 'voice' is to send financial messages to those that support this and Shelter, ( Nationwide ) More Landlords who use the services of Shelter's sponsors need to look at where a proportion of their fee's is actually going - to hurt their business !

JJ

17:32 PM, 10th June 2019
About A week ago

If you are hanging on to property to invest in it and improve it, e.g. by increasing the number of people it can comfortably accommodate which is part of the solution to housing people, or developing it so that it can accommodate the elderly or disabled, or just improving the EPC, where is the incentive in this report to do it?

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