NLA critical of Labour housing policies

by Property 118

9:04 AM, 27th April 2015
About 4 years ago

NLA critical of Labour housing policies

Make Text Bigger
NLA critical of Labour housing policies

Responding to Labour Party leader Ed Milliband’s announcement on new measures to cap rents, a legal requirement to disclose rent charged to previous tenants, and restricting tax reliefs for landlords who don’t keep properties to basic standards.

Richard Lambert, CEO of the NLA said, “we understand Labour wants to assure tenants they have their concerns at heart, but this policy will backfire because they don’t understand the economics of supplying private housing to rent.”

“These changes will have far-reaching consequences for the private rented sector, for landlords’ willingness to put their own money into providing homes, and for mortgage lenders’ view of the risk in supporting them.  If these proposals are going to be rushed into the first Queen’s Speech, less than a month away, without time to think through the consequences, Labour’s good intentions could make the housing crisis worse, not better.”

“NLA research has found that around two-thirds of landlords don’t increase rents during a tenancy.  Capping annual price rises to inflation sounds like a great consumer protection initiative, but wherever these formulas have been introduced, it’s proved to be counterproductive because it leads to a culture and expectation of regular increases by whatever is allowed.”

“Restricting tax reliefs for landlords who don’t keep their properties up to standard is a good headline, but it leaves many questions unanswered.  Who decides that the restriction will bite and how would it be assessed?”tape



Comments

Jerry Jones

9:32 AM, 27th April 2015
About 4 years ago

I am minded to ask my agents to send the following to all my tenants:
------------------------------------------------------------------------------------

Please read all of the following carefully. It does not mean that you will have to pay significantly more each month.

Following Mr Miliband's announcement of a policy, if Labour forms the next government, of introducing rent controls for a period of 3 years together with the likely effect of their other policies on interest rates, we have decided to change the way in which your payments are calculated.

With effect from 6 May, your rent will increase by the figure of 20%

At the same time, we are introducing a prompt payment discount scheme. Rent paid on or before the due date will attract a discount from the nominal rent of 16%. Within the 7 days following the due date, this will decrease to 8% and if the rent is paid any later there will be no discount. When the rent due date falls at a weekend or Public Holiday, the first working day after that will be regarded as the due date for the purposes of this discount.

As you know, unlike other local landlords, we do not impose regular rent increases during a tenancy and yours has remained at £XXX since you came to live at (address) in 20XX and it is now approximately £XXX (X%) below the market rate for the area. We are aware the rents locally have risen very steeply over the last 2 years but it is not currently our intention to follow them. However, our income from your home will need to reflect changes in our costs if and when they happen. It is likely that the law will allow rent increases in line with inflation, and we will consider those on an annual basis.

The linked proposal to require 3 year tenancies will not affect us because you would still have the right to give 1 month’s notice and, unlike many “amateur” landlords who may wish to move back in themselves or sell a property, we are professional investors who do not normally sell and are very happy to see our tenants remain in a property for the long term. As we understand it, it is the intention for the current reasons to end a tenancy, such as antisocial behaviour, failure to respect our property or rent arrears to remain.

Anthony Endsor

10:59 AM, 27th April 2015
About 4 years ago

I am inclined to agree Jerry. The big problem for us Landlords is, this is likely to be an election winner for Labour, as we won't get too much sympathy from the masses.
I don't normally increase rents during a rental period, but now I will have to, only so that when the time comes when I do need to increase rents, (interest rate rises meaning higher cost on mortgage, etc) I am already covered.
This is really unfortunate that I will have to do that, because I have very good tenants in some of my properties who haven't had their rents increased for 5 years or more, who will now face annual rises in line with inflation.
I wonder which queue Ed Miliband was in when they were handing out brains?

Barry Fitzpatrick

11:07 AM, 27th April 2015
About 4 years ago

Likewise the prohibition of Letting Agents fees will be passed to the Landlords, who will pass these on to Tenants in the form of higher rent.

I would qualify this by saying if the Labour Party does not form the next Government then these changes will be rescinded.

The Labour Parties proposals for the PRS WILL increase costs to Landlords which will be passed on to Tenants in the form of higher rent.

Dr Rosalind Beck

12:41 PM, 27th April 2015
About 4 years ago

Yes, when we keep reading of rents going up, I know that doesn't relate to our rents. We even have a tenant who has been with us for 10 years, paying £325 a month and we have never increased it...
And Shelter presented a report this week, I believe, saying rents had gone up by 2% in the last year and this equated to £10 on a monthly rent of £500! How awful! (even though our rents haven't even gone up at all)

Anthony Endsor

13:13 PM, 27th April 2015
About 4 years ago

1st June 2016 headlines.....

TENANTS LEFT HOMELESS AFTER LANDLORDS SELL PROPERTIES

Good evening, the number of tenants of Private Rented Housing being left homeless has increased dramatically over the last 12 months as Landlords quit the rental industry and sell the properties. Many of the properties have been sold to immigrants, entering the country after the government relaxed the rules on immigration. Homeless charity Shelter are said to be deeply concerned by the situation....

Gary Nock

6:14 AM, 28th April 2015
About 4 years ago

Jerry I was so incensed and concerned when I heard this leftie claptrap that I immediately looked at my portfolio and that of my managed landlords and began to draw up my increases. Like you I do not normally increase rents. But the ability to do so would be taken away from landlords very quickly. Your spoof letter was very similar in the first part to what I was going to tell tenants as to why their rents were going up.

The politics of envy and class war from Labour. We must protect the poor downtrodden tenants from the nasty capitalist landlords!

Jerry Jones

9:29 AM, 28th April 2015
About 4 years ago

Actually, mine is not a spoof - it's a genuine idea to retain the ability to effectively set rents without actually increasing them now.

Romain Garcin

9:52 AM, 28th April 2015
About 4 years ago

Reply to the comment left by "Jerry Jones" at "28/04/2015 - 09:29":

Hi Jerry,

The ability to increase rents is set in the tenancy agreement and the law. Your draft letter would have no effect apart from proposing new arrangements that your tenants will be free to refuse or just simply ignore.
It might also antagonise a few tenants...

In view of the anti-PRS rhetoric at the moment, I think landlords should avoid inflammatory actions.
Wasn't there a public demonstration (organised with political backing, no doubt) a few weeks ago in Bristol just because a letting agent had sent marketing letters to landlords?

Do have the section 13 notices ready for after the elections, though. 😉

Joe Bloggs

11:29 AM, 28th April 2015
About 4 years ago

Reply to the comment left by "Anthony Endsor" at "27/04/2015 - 10:59":

'I wonder which queue Ed Miliband was in when they were handing out brains?'

is it brainy to not put up rents in line with the market?

Anthony Endsor

12:01 PM, 28th April 2015
About 4 years ago

Reply to the comment left by "Joe Bloggs" at "28/04/2015 - 11:29":

Yes, when you have good tenants and your costs are not increasing. Why risk losing a good tenant and then getting a numpty in their place? Not to mention voids, etc.
Makes sense to me.

1 2

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?

OR

BECOME A MEMBER

And the landlord vote goes to - ?

The Landlords Union

Become a Member, it's FREE

Our mission is to facilitate the sharing of best practice amongst UK landlords, tenants and letting agents

Learn More