The renters reform bill (a sad act)?

The renters reform bill (a sad act)?

0:01 AM, 24th June 2024, About 6 months ago 7

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In 1988 Thatcher reformed the property market opening the way for BTL mortgages. She created new legislation and new tenancies were formed. Old contracts were not touched just new offerings introduced.

At that point, 7% of property was rented through the private sector. This grew to 20% of property by 2021 and with 5 million homes covered the PRS which overtook the social sector. By 2021 social housing shrank to 4m homes.

The BTL system was underpinned by new rules. These include affordability criteria currently set by the Bank of England (PRA) arm and legal contracts to underpin the tenancy being offered usually ASTs.

The system worked as expected with people borrowing within their affordability levels and offering known terms in contracts. In fact in 2023 according to Shelter only 0.4% of tenancies resulted in a bailiff eviction through a section 21 – no-fault route. Around one in two hundred tenancies.

So why the drama? and we have buckets full.

The Bank of England set affordability rules under Section 2.12 of PRA regulation. This explains mortgages should be affordable for 5 years and the rules allowed for rates to rise by 2%. But the Bank then raised rates by 5.24% nearly three times their own criteria in around a year – this immediately made many affordable mortgages unaffordable. It’s a bit like buying a car then the garage telling you it costs three times as much. Meanwhile, the banks paid people with money in the bank much more than they expected with healthy interest payments. The BoE became a reverse Robin Hood, disowning borrowed protections and handing the ‘borrowing tax’ to savers.

At the same time, the Rental Reform Bill decided that 5 million existing contracts should be modified or undone. Despite these regulations having covered tens of millions of contracts since 1988 and despite there being 5 million live contracts in force.

In essence, the government thought it was a good idea to rip up 5 million contracts and appears surprised it is being criticised.

The solution was always right there and was set in 1988 where new regulation allows for an evolution rather than a destruction of the old system. Allowing new products and contracts to be offered on different terms as and when they were needed is much less destructive. To undo all existing contracts that 5 million had agreed to is unprecedented. No wonder it has been beyond contentious.

It would be much more efficient to offer new contracts as and when with new conditions. The parties can at least decide if the terms are then acceptable before continuing.

Successive governments have failed to ensure sufficient supply of homes that then choose to whip the home providers. This is the policy of the foolish? Perhaps delusions of competence.

When will we again see sense in policy where the established rules and policies can be relied upon?

Paul


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Judith Wordsworth

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10:51 AM, 24th June 2024, About 6 months ago

Well said

Reluctant Landlord

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11:11 AM, 24th June 2024, About 6 months ago

bang on.

TheSwan

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11:59 AM, 24th June 2024, About 6 months ago

I can't understand why they don't leave everything alone for those contracts that are already in place. Tenants can choose if they wish to move house and enter a new contract and landlords can choose whether to evict and thus put themselves into the new contracts going forwards. I think that you will find that landlords would rather stay with a tenant with section 21 in place in their existing contract than evict their tenant and enter into the new tenancy agreements without section 21. Doesn't this sound like the most sensible option? This would satisfy everyone and allow for the removal of section 21 without immediate court reform being needed? Tell your political party leaders. Mass mail now.

Monty Bodkin

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12:32 PM, 24th June 2024, About 6 months ago

https://www.accommodationforstudents.com/student-landlord-guides/4356

"The chief executive of the National Residential Landlords Association (NRLA), Ben Beadle was the first to say that politicians need to bring in a new law for the private rented sector.

He says that the shelving of the Bill was a 'huge blow' "

- I doubt that is the view of most landlords.

Mick Roberts

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13:05 PM, 24th June 2024, About 6 months ago

Great words:

It’s a bit like buying a car then the garage telling you it costs three times as much

At the same time, the Rental Reform Bill decided that 5 million existing contracts should be modified or undone

It would be much more efficient to offer new contracts as and when with new conditions.

Successive governments have failed to ensure sufficient supply of homes that then choose to whip the home providers

Retrospective changes are killing low earning tenants homes.

Stewart

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17:01 PM, 24th June 2024, About 6 months ago

You need to remember that left wing organisations like Shelter and Generation Rent are opposed to private landlords no matter how well we treat our tenants. There current strategy is to force control of private property out of the hands of landlords and into the hands of the tenant or the state.
The astonishing stupid Tories bought the whole deal. Despite their sucking up to the left the left will still hate them, as will tenants. Landlords like me will never vote Tory again. Great deal for Crisis, Generation Rent and the left. They turned the Tories over, screwed landlords and removed a large voter platform from voting Tory again.

Judith Wordsworth

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10:53 AM, 29th June 2024, About 6 months ago

Reply to the comment left by Stewart at 24/06/2024 - 17:01Have they bought the whole deal or even the deal?
The Bill never made it to law.
Being cynical is it just a to get votes and if in power again it won’t actually ever see the light of day or statute books?
I’ve already set up a meeting with my Conservative MP should he be returned to Parliament to discuss - well he’s asked for the meeting to discuss working with and not crucifying PRS landlords.
We shall see

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