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

Text Size

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

Mandy Thomson

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

Reply to the comment left by "Neil Patterson" at "01/05/2014 - 12:28":

Most voters can't see further than the next month ahead.

Neil Patterson View Profile

13:00 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Mandy Thomson" at "01/05/2014 - 12:57":

I am just so angry Mandy. It is everything I hate about politics in this country.

The mere fact you want to be a politician should preclude you from being one !!!!

Mandy Thomson

13:22 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Neil Patterson" at "01/05/2014 - 13:00":

Ed Milliband clearly isn't concerned about tenants exploited by rogue landlords, if he were, he would have thought through his reform proposals more thoroughly - perhaps actually done some (unbiased) research!

In addition to driving law abiding landlords out of the PRS, he is simply going to encourage more rogue landlords. Hey, didn't that happen before - wasn't there a chap called Peter Rachman?? But that's not in anyone's living memory, voters will scarcely remember 2008 - 2010, when everyone commenting in the Guardian was screaming for the head of Gordon Brown...

When my application for the Housing Department at Enfield Council gets turned down, I'll apply to get elected as a politician... Ed Milliband has almost inspired me to join the Tory party... If not that, then the men in white coats are beckoning!!

martin wilkinson

14:47 PM, 1st May 2014, About 8 years ago

Clearly we should not all confuse fishing for votes with potential future policy! What did Ed and his colleagues do when they had the chance to intervene in the PRS apart from passing the rent cheque to the tenant?
The point is you can have a 3 year AST if both parties are happy now but few are granted. A good point about being in breach of mortgage terms!
Having an income stream in place is what makes a property into an investment and not just a building - so will not reduce its value - the trend is for a transfer of properties from owner occupation to the PRS not vice a versa!

matchmade

16:28 PM, 1st May 2014, About 8 years ago

I think people may be barking up the wrong tree regarding this 3-year minimum tenancy issue. I suspect this will only apply to the landlord, not the tenant. So, when the landlord signs the AST, she won't be able to give the tenant notice within 3 years except in a narrowly-defined set of circumstances, viz non-payment of rent, proven anti-social behaviour, proven damage beyond fair wear and teat, and perhaps where the landlord wishes to re-occupy the property as their Principal Private Residence and can demonstrate the need for this. The tenant, however, will be allowed to retain the freedom to give notice during the course of the AST, as and when they like, with a reasonable notice period. This means the tenant has the flexibility to leave when he wishes to, but knows that he has the right of occupation for three years otherwise, provided he plays fair.

At least, I *hope* that is the approach that will be adopted, if Labour persist in this policy and are elected. If not, I know that my HMO tenants are going to be furious if they're told they have to stay three years. Their lives change too rapidly - new jobs, new partners, re-entry into graduate education, and so on. They don't even like it if I propose a new 6-month tenancy after the first AST expires, and much prefer a periodic arrangement.

All this fuss about families being forced to move home every six months means policy is being determined by them and appears to be ignoring the needs of tenants who rent privately by choice and actually prefer this. Labour, organisations like Shelter, and 99% of public sector workers appears to believe that no-one in their right mind would rent from a private landlord by choice, and that it is therefore their job to save the poor impoverished working tenants from the non-productive rentier class, a.k.a. the grasping Rigsbys that infest websites like Property118.

Mandy Thomson

16:56 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Tony Atkins" at "01/05/2014 - 16:28":

Most decent professional landlords would only serve notice on a tenant within six months if a totally unforeseen event arose and they had no choice, or the tenant was breaking the agreement. If you read the article in the Guardian, you will see that tenants rights to terminate the rental agreement would stay as they are now, and landlords would retain the right to serve notice under certain circumstances - even after the first six month period was up. However, this proposal, together with the proposed rent cap, would deter an awful lot of good landlords and potential new landlords.
As always, this just leaves the rogue landlords, who would carry on flying under the radar and doing just what they like - just like Rachman and others like him did under rent controls in the 60s and 70s >http://www.lettingfocus.com/blogs/index.php/2011/12/london-living-rent-landlord-accreditation-and-ken-and-boris/. Rachman got away with it because his poor tenants had little housing choice. In additon, Mark mentions that when a similar scheme was implemented in Ireland, it just resulted in tenants being kicked out after the six month probationary period - so as well as damaging the PRS and worsening the housing shortage, these reforms would actually lead to even more insecurity for tenants.
BTW, just in case anyone thinks I'm merely a self interested landlord, I was also a tenant myself until very recently, and no, I had no problem with the current system from a tenant's perspective, just as none of my tenants do either.

Anon

17:42 PM, 1st May 2014, About 8 years ago

I really can't see what all the fuss is about.

Professional landlords want long term tenants if they are good and the right to get rid of them if they are bad. The Miliband proposals allow that.

Accidental landlords want to rent their properties and the ability to sell them after 6 months if market conditions are right. The Miliband proposals allow that.

Good landlords want to improve the tarnished image of the industry. The Miliband proposals will effectively stop retaliatory evictions, a major gripe amongst tenants and support groups such as Shelter. Why would good landlords not support that?

I can't see too much difference between the Miliband proposals and Mark Alexander's Deed of Assurance he provides to his tenants. If anything, the Deed of Assurance offers better protection for tenants but that is debatable, as is the point on how mortgage lenders will react to the Miliband proposals.

Ian Ringrose

18:07 PM, 1st May 2014, About 8 years ago

Anon,

The problem is that a landlord will have to PROVE that the tenant is bad as part of the eviction process. The tenant will have legal aid; the landlord will have to pay his/her own legal costs.

It is normal for a landlord to be advised to only use a S21 to evict even if it can be done quicker on “fault” grounds (e.g. rents often paid late), as there has been so many cases of judges feeling sorry for tenants and believing whatever lies the tenant makes up on the day.

If the tenant is not in work, it is very unlikely that the landlord will be able to recover his/her legal costs after winning the case.

This will just make it even less likely that any landlord will rent to someone on benefits.

(Mark’s Deed of Assurance lets the tenant get limited compensation from the Landlord, if they are evict and can prove that they have behaved themselves 100% of the time. So removing the issue of the judge feeling sorry for the tenant that is just about to be made homeless.)

Mark Alexander - Founder of Property118 View Profile

18:22 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Ian Ringrose" at "01/05/2014 - 18:07":

Thank you Ian, you have clearly understood the Deed of Assurance very well. It addresses the current imbalance in Landlord and Tenant laws from all perspectives. Now all we need to do is convince Government and Shelter of this!
.

Anon

18:36 PM, 1st May 2014, About 8 years ago

Reply to the comment left by "Ian Ringrose" at "01/05/2014 - 18:07":

You make some very interesting points Ian and having studied the Deed of Assurance in detail I do concur with your general observations in the differences between that and the Miliband proposal. However, are you really telling me that a judge will not grant a possession order on the reasonable grounds of section 8 which are proven?

For example, if a tenant has lost her job and fallen 2 months into arrears, been served a section 8 notice followed two weeks later with an application to the Courts for possession, are you telling me that a judge will suspend the possession if the tenant has found a new job in the meantime and made proposals to clear the arrears?

Now some might argue that 'the right thing for the landlord to do' would be to offer some sympathy for the tenants predicament and consider the proposal fairly. However, I fail to see how any judge can have the discretion to insist upon such leniency. If you are telling me that judges are really doing this, what is legal justification have they been offering to landlords?

I have heard many stories of this type of thing but have never seen any real evidence of it, have you?

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now