Will Ed Milliband lose 1 million landlords votes over this?

Will Ed Milliband lose 1 million landlords votes over this?

10:46 AM, 1st May 2014, About 8 years ago 70

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Ed-Miliband

Ed Milliband has stated that if he is elected at the next election the labour government will make residential tenancies a minimum of three years and a cap will also be imposed on rent increases.

Given that there are over 1 million private landlords in the UK I suspect that could provide a very good reason for them not to vote for him!

It has been leaked that at the launch of Labour’s local and European election campaign in Redbridge later today Milliband will say …

“We need to deal with the terrible insecurity of Britain’s private rental market as well. Many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice with no reason.

“Some are told to accept huge rent rises or face eviction. It breeds instability and that is bad for tenants, bad for families, bad for landlords, and bad for our society.

“The next Labour government will legislate to make three-year tenancies the standard in the British private rented sector to giving people who rent the certainty they need.

“These new longer-term tenancies will limit the amount that rents can rise by each year too – so landlords know what they can expect each year and tenants can’t be surprised by rents that go through the roof.”

Obviously Ed Milliband hasn’t heard about our Deed of Assurance, or maybe he simply doesn’t understand it or chooses not to as it doesn’t fit his political agenda? Back in June 2013 The Mortgage Works (the specialist BTL lending arm of Nationwide Building Society) announced that it would accept three year tenancies. The take up has been remarkably low. The announcement inspired a huge debate over the issues surrounding longer term tenancy agreements here at Property118 – link to the thread HERE.

NLA Chief Executive Officer Richard Lambert has commented ….

“The proposal for a three-year default tenancy is unnecessary, poorly thought through and likely to be completely unworkable.

“Private individuals put in the region of £20bn into providing housing for rent last year.  Fundamentally changing the structure of tenancies will create uncertainty amongst these landlords and the lenders which provide the finances underpinning housing in the UK. Were these proposals to become government policy it would strike a devastating blow to investment in housing of all tenures and further constrain supply at a time of real housing crisis.

“We are concerned that the proposals will actually increase the insecurity of tenure for renters.  The experience of Ireland, where a similar system of six month introductory tenancies has been running for some years, is that landlords, concerned about the danger of being unable to end a problem tenancy, look to move tenants on after six months rather than find themselves forced into inflexible restrictive tenancies.

“This does nothing to create a fair and balanced rented sector that works for landlords, tenants and agents.  Frankly, I’m surprised that, after the effort Labour front-benchers put into consulting on how to make the private rented sector work better, Ed Milliband announces a change which risks putting landlords in a position of conflict with their tenants and leaves future housing provision on a knife-edge.”



Comments

Neil Patterson View Profile

12:21 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Mandy Thomson" at "01/05/2014 - 12:18":

@ Mandy

That sounds like an unfair contract to me !

Adam Hosker

12:23 PM, 1st May 2014, About 8 years ago

The idea for longer tenancies I imagine is fine for most landlords, so would be increasing rent by a restricted value (in that term).

For the insecurity of a longer term tenancy, landlords need more security to ensure possession can be obtained efficiently when a tenant puts a landlords investment at risk.

This is the same reason lenders dont like long term tenancies, they want to ensure they can obtain possession to protect there investment in the landlord that turned sour.

Labour is missing the vital point, that LANDLORDS and LENDERS have a lot of funds at risk. Yet there is no discussion with landlords from Labour, this was an anti-landlord proposal. The RLA has come out and disputed the assertions Labour has made.
It is; the wrong approach.

(( Part of me likes the idea of 1 million landlords, putting up banners on there many rented properties. Opposing Labour efforts to put their investment at risk during election time. ))

Mark Alexander - Founder of Property118 View Profile

12:26 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Mandy Thomson" at "01/05/2014 - 12:18":

First loophole spotted 🙂

If I can evict by selling then I could sell to my wife if I want to evict. No CGT on transfers between spouses.

Not cost effective though in terms of rearranging mortgages but it just goes to show how badly thought out Milliband's ideas are if I can start to spot loopholes before he's even delivered the leaked speech!!!
.

Neil Patterson View Profile

12:28 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Lou Valdini" at "01/05/2014 - 12:21":

@ Lou,

Sadly it seems very few of the Labour party (and to be honest most of the others too) understand economics so 3 terms in power is just wasted. Fortunately most voters have no interest in economics so apparently this is not a prerequisite for running the country. 🙁

Economics is a social science observing human nature and predicting reactions to stimulus such as scarcity, need, motivation etc. That is why they can't understand that the relationship of Landlord and Tenant is symbiotic !!!!

Mandy Thomson

12:35 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Neil Patterson" at "01/05/2014 - 12:21":

Darn, I was about to get my job application in for Housing at the London Borough of Enfield... You'd be guaranteed a job for life, but that probably wouldn't be very long as you'd be unfit for work after six months - or worse...!

And I thought just being a floor manager at a job centre in the middle of the recession was bad!!

andrew jones

12:37 PM, 1st May 2014, About 8 years ago

interest rates could rise substantially in three years and limiting rent rises coupled with three year tenancies is only going to lead to mortgage default and repossessions.Who does that help?

Neil Patterson View Profile

12:42 PM, 1st May 2014, About 8 years ago

Politics is fundamentally flawed due to the need to say what ever will be statistically the most popular.

Mark Alexander - Founder of Property118 View Profile

12:51 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Neil Patterson" at "01/05/2014 - 12:42":

About a popular as a f........................................

OK, let me put it this way, Milliband may well be the last man standing in the 30 second clip LOL (may me giggle anyhow!)


.

Ian Ringrose

12:54 PM, 1st May 2014, About 8 years ago

Most of the cases I have heard of when good tenants are forced to leave by landlords is when the landlord decides to sell. Most of these landlords only have 1 rental property. So Miliband does not understand what goes on, unless “a good reason to sell” is defined so strictly that it is of no use. If so anyone that has to move for work, will just have to leave there home empty if the market is poor at the time.

A lot of cases of tenants complaining about landlords putting up rents are when the landlord has not put up the rent for a few years. If there is a limit to how much I can put up rents each year, then I am most likely to put the rent up every year.

Neil Patterson View Profile

12:57 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Ian Ringrose" at "01/05/2014 - 12:54":

Excellent points Ian, and there are many accidental landlords due to the recession who have had to move, but couldn't sell.

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