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10:47 AM, 1st April 2015, About 9 years ago 16
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I was reading my local rag online last night and came across the following story regarding rent increases (I’ve removed the Agent’s name and other details so as not to break the house rules):
A letting agent is encouraging landlords in Southville to put their rents up because of Bristol’s “buoyant” rental market.
Agent xxxx sent a letter to the landlords who use their services claiming it was “highly likely” that their properties were due a rent increase.
It caused outrage from people who say the agent is cashing in on people who can’t afford to get on the property ladder.
The letter, sent from the agent’s Southville branch, asks landlords: “Are you getting enough rent?”
It said: “With rents increasing every week in Bristol, it is highly likely your property is due a rent increase.
“The demand from prospective tenants is far exceeding the number of available properties and we have never seen such a buoyant rental market.”
A petition has been started online to “stop xxxx exploiting the housing crisis in Bristol.”
The creators of the petition said: “The letter shows how some estate agents and landlords are seeking to cynically profit from the housing crisis in Bristol at a time when inflation has declined to 0.3 per cent and deflation is predicted. I think there is no justification for increasing rents at a time when prices are actually going down. In addition, real average earnings have fallen by 8 per cent every year since 2008.
“Such predatory rental practices are an attack on low income people and threaten the most basic of rights – the security of a home to live in.”
A woman called Mary signed the petition and posted: “This is worrying and has obviously touched a big nerve in the city but all the other agents are doing it too.
“The petition would be more effective if it was towards the council to intervene in rent prices.”
In the letter, the letting agent said it had recently let a one-bedroom house in Coronation Road for £835 per month.
And it had let a two-bedroom house in Windmill Hill for £1,500, and a three-bedroom house in Kingston Road for £1,600.
xxxx, managing director of five xxxx sales and lettings offices in north, east and central Bristol, posted his opinion of the letter on Twitter.
He said: “I agree [with the petition] and have signed, my offices believe in good service as reason to use us, shame Southville have chosen this route.”
He added: “No office under my control sends these nor will ever.”
xxxx does not control the Southville office, where the letter came from.
Stuart Melvin, a national organiser for Acorn, said: “This letter has highlighted the issues of increasing rents and inequality in Bristol.
“We know there is a housing crisis. This kind of aggressive marketing from an agency is damaging.
“Landlords take the advice of the letting agent very seriously and they will put the rent up.
“They are exploiting the housing crisis we are facing. There is a shortage of all kinds of housing, affordable or not.
“People are being squeezed out of home ownership and now more and more people are prized out of even renting.”
Mr Melvin added that thousands of people were on Bristol City Council’s housing register, and more would be forced to join it if rents get too high.
He said: “If there is not enough social housing, and people can’t rent and they can’t buy, where are they supposed to go?
“Acorn are keen to reach out to xxxx and see them make an apology or sign our Ethical Lettings Charter. If agents are serious about doing things fairly, they should make a statement and sign up.”
A spokesman for xxxx confirmed the letter was sent by the Southville office, but refused to comment further.
It is not known when the letter was sent to landlords, but it is thought to be recently.
A spokesperson for Generation Rent, a campaign group fighting for affordable rent, told the Metro: “Landlords don’t have to put up rents, but as the housing crisis worsens and tenants get more desperate, landlords who don’t raise rents are being told they’re stupid for not doing so.
“No-one powerful is challenging them not to raise rents on the grounds of simple ethics.
“Tenants are increasingly seen as nothing more than cattle to be milked.”
Letters like the one sent by xxxx can be common practice in some agencies.
Aisha Egala, who rents in Bristol, said: “Clearly disgusting for tenants, but nothing new. Agencies are a big factor in our unsustainable rental market.
“I’m glad this letter has been published so we can all see why all of a sudden our rent has gone up. Mine went from £900 to £1,200 in the space of 18 months.”
Landlord Jo Massey said: “I’m a landlord and the only justification for a rent increase is the costs increasing or improvements to the property. I’ve signed the petition to stop xxxx using this letter.
“I’ve never used an agent their rates are ridiculous, I’m not sure why any landlord or tenant would use one nowadays unless you are not local to the property and able to respond if there’s a problem.”
Just thought I’d post this for all to see and get your opinions on such a tactic?
Samir
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Neil Patterson
11:02 AM, 1st April 2015, About 9 years ago
Hi Samir,
I can see how this letter touting for business is perceived as insensitive for people struggling in the housing market and was potentially misguided from a PR point of view.
The real issue is that the Private Rental Sector (PRS) has to take up the slack from Social Housing and not enough properties are being built.
The PRS is a business and operates in a mature market where price is dictated by supply and demand. The housing crisis and lack of Social housing is creating a much higher level of demand than supply can match. This will always force up prices.
The only solution to this is to either take away market forces by Nationalisation of the rental industry (impossible I would have thought) or increase the supply of new property, social housing and encourage the expansion of the PRS.
If you put a cap on pricing then supply will naturally fall further. It is simple economics even if it is not palatable.
Sam Addison
11:54 AM, 1st April 2015, About 9 years ago
I don't know what the capacity is for building new houses/flats in Southville but the laws of supply and demand would suggest that if rents were raised then more people would want to be landlords there with a subsequent rise in house prices and this may work through to more houses being built thus going some way to resolving their housing crisis.
I agree with you Neil, definitely bad PR though.
Mark Alexander - Founder of Property118
12:01 PM, 1st April 2015, About 9 years ago
If there are not enough properties for everybody to have one then it is inevitable that people who can afford to pay more will be the ones landlords will choose to rent to.
This is simple economics, it's not the fault of landlords that there are not enough properties.
If every landlord in Bristol sold their properties to an owner occupier there would still be no more properties then there are today would there?
Capping rents would be like capping fuel prices. Either we are a capitalist economy or we are not. Do we really want a communist regime? For those who wish to answer yes, I'm sure there are a few that you could relocate to, North Korea perhaps?
.
Mark Alexander - Founder of Property118
12:18 PM, 1st April 2015, About 9 years ago
Reply to the comment left by "Sam Addison" at "01/04/2015 - 11:54":
Big thumbs on from me on that comment Sam.
The trouble is, too few people understand even the most basic principles of economics which means they will not be able to follow your logic, even though it is very simple to many of the core members of Property118.
.
12:46 PM, 1st April 2015, About 9 years ago
Just an observation:
QUOTE: Landlord Jo Massey said "I'm a landlord and the only justification for a rent increase is costs increasing or improvements to the property"
Seven or eight years ago when interest rates were rising we had landlords like Jo Massey wanting to put the rent up "because my mortgage payments have increased". They struggled to grasp the notion that market rents didn't suddenly go up in line with their mortgage payments.
The market rent is dictated by supply and demand, not how much the landlords' costs are (though one will of course feed through to the other over time), but Jo and her ilk don't grasp that.
It was a poorly thought out piece of marketing by the agent in question though.
Mark Alexander - Founder of Property118
12:50 PM, 1st April 2015, About 9 years ago
Reply to the comment left by "Steve From Leicester" at "01/04/2015 - 12:46":
Hi Steve
To the contrary I think it was an amazing piece of marketing, there is no such thing as bad PR, unless you're the agent who condemned the latter and possibly had his very own "Ratner moment".
If you were a landlord in Bristol and had the choice of dealing with one of those two agents who would you pick?
Look at the free brand awareness they both got out of this!
.
James dengel
13:36 PM, 1st April 2015, About 9 years ago
I think that the petition is more about the aggressive behaviour of the letting agent in encouraging landlords to raise rents rather than about the raising of said rents. I agree it's supply and demand pushing rents up
the article tells us one person had their rent increased from £900 to £1,200 over 18 months 33% seems a bit excessive
I for one would prefer a low rate of return for someone who looks really after my investment and tells me of issues immediately. This is worth more to me than a bit of extra money every month (which most goes to the government anyway), however this is hard to know before a tenant has moved in.
Sam Addison
13:48 PM, 1st April 2015, About 9 years ago
Reply to the comment left by "Mark Alexander" at "01/04/2015 - 12:18":
I was going for the long sentence award Mark 🙂
14:36 PM, 1st April 2015, About 9 years ago
I wonder how effective signing a petition will be. I think it would be more effective for people who don't want to pay higher rents to vote with their feet and just walk away and find cheaper alternative.
I sold a car once and everyone said I was asking too much and as no one had bought it after a few weeks so I guess I was. I reduced the price and it sold really quickly. I thought I deserved more money for it, some people wanted to pay even less for it. Landlords will reduce their prices IF their properties are empty after weeks of marketing. None of us can choose what a fair price is - the market will do that.
We have to accept that a nice flat in a nice part of town where everyone wants to live will cost you more than a not so nice flat in a not so nice part of town where fewer people want to live. I think that's fair.
I spoke to someone who thinks zero hours contracts are the worst things ever and should all be banned. But they happen to love Sports Direct because it's so cheap and they buy all their stuff there. We all have choices where to spend our money and by buying something you must accept that you are supporting it.
John
15:38 PM, 1st April 2015, About 9 years ago
I think the coop movement started in Bristol and they have a very community minded population. They have the Bristol pound which aims to keep income inside the city. I am not surprised local people have come out against this marketing.