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

Hazel Taylor

9:26 AM, 2nd May 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "01/05/2014 - 12:08":

We as landlords must make sure that all these problems are pointed out in every meida outlet we can. Perhaps, eventurally Milliband might realize that he did not have any idea what he was talking about.
H A Taylor

Mandy Thomson

10:00 AM, 2nd May 2014, About 8 years ago

After I'd finished some disagreeable tasks concerning my property portfolio yesterday evening I caught the end of Question Time - everyone is talking about Milliband's proposals - David Dimbleby mentioned that expert opinion is very much opposed to them and a panel member went so far as to call them "stupid".

As someone on here has already commented, it's obvious that he is playing to the anti landlord/anti PRS brigade - but he's dug a nice hole for himself - if he gets elected and tries to implement this, he will damage an important industry and add to an already critical housing shortage (though no doubt he proposes to build more council houses - but even assuming this is the answer, it won't happen overnight) or if he doesn't implement it, he'll look like just another cynical, self serving politician...

NewYorkie View Profile

12:23 PM, 2nd May 2014, About 8 years ago

Reply to the comment left by "Mandy Thomson" at "02/05/2014 - 10:00":

@Mandy - I totally agree with everything you say. However, no government has been able to meet social housing build targets, so that won't be an answer. In LB Hounslow, which is responsible for Chiswick where I live, their focus over the coming years in their Local Plan is on attracting business and building massive numbers of private apartments, which are currently being sold in the Far East for BTL! No or very little social housing, and they recently drove a massive coach and horses through every byelaw and guideline, when they approved a private development for a new football stadium for Brentford FC (congrats on promotion!) including 900+ high rise apartments, with no social or affordable housing and no s.106 from the developer ...and that's a Labour council.

Unfortunately, playing the populist card or not, if he is elected, that's it for the next 4 years!

Sharon Betton

12:24 PM, 2nd May 2014, About 8 years ago

It seems these policies are devised mainly to hit London, with its' often poor quality accommodation, beds in sheds and a transient community. Lou has only ever had 1 tenant who wanted to stay longer than 3 years? The situation in the Northwest, certainly over the last few years, is very different. Many landlords tell me their tenants stay 8, 10, 20 years and these are not top-end of the market properties, just decent landlords providing a good standard of accommodation.
Unlike previous changes when landlords have threatened they will leave the market (ie selective licensing, local housing allowance, direct payments to tenants) I think this change could lead to many landlords finally kissing goodbye to the private sector.

Good landlords want to keep good tenants; constraining them to provide 3 year tenancies without easing the eviction process is a no-go - and bear in mind the horrendous rise in the costs of eviction. This will not stop evictions, but may very well stop tenancies being created.

Mark Alexander - Founder of Property118 View Profile

15:36 PM, 2nd May 2014, About 8 years ago

The Guardian newspaper are running an online survey on whether they think Milliband's proposal will be a good idea for the economy. At the time of writing this comment 81% are in favour and 19% are against. I'm hoping that Property118 readers can help to redress that balance somewhat. For a link to the article/survey please see >>> http://www.theguardian.com/housing-network/poll/2014/may/01/miliband-labour-rent-reforms-poll and leave a comment here to say what you think of the full article and which way you voted.

Thanks in advance 🙂
.

Mandy Thomson

17:09 PM, 2nd May 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "02/05/2014 - 15:36":

Thanks for putting this link on your site, Mark. I of course voted "No". However, most of the people who read Guardian articles on housing, I suspect (from comments) are young, wannabe home owners who've become frustrated and embittered and see buy to let landlords as depriving them of their "right" to own a home simply by buying property and therefore preventing housing prices from coming down, then "fleecing" them for high rents to rent back the properties that they should have been able to buy in the first place...
While I can see where they're coming from, and certainly am not unsympathetic, I'd like say this (and will make the same comment on the Guardian Poll article) - we live in a capitalist, free economy - and although you might not believe it now, you will find that heavy state interference in an economy is a bad thing and tends to actually exacerbate the problems it intended to solve - Google "Rachmanism" - it was state interference in the housing market of the day that helped this extremely crooked landlord to flourish.
It has to be remembered that we are only just coming out of the worst economic crisis since the great depression of the 1930s - our economy still needs to recover, but the recovery has started and it will get a lot better - more people will find more stable jobs, paying better wages, and in turn, even though house prices may not fall, banks will become more confident about lending, and more financing and innovative ownership schemes will become available to enable more people onto the housing ladder again.
It has always been tough for first time buyers - after graduating, my partner lived for several years as a lodger, before buying the only home he's ever owned - he managed to get a 100% mortgage, then spent the first few months living there sleeping on the floor as he was stretched to his financial limit and couldn't afford a bed or a sofa. That was back in 1982, and he was a well paid professional. Another friend of mine worked in three jobs at the same time to get his first mortgage, for a very modest and uninspiring one bed flat over a shop in 1988. Yet another friend spent years saving up for a deposit to buy a place by living in dreadful flat shares - the final straw came one day when his flatmate's ex boyfriend tried to kill her in flat - there was blood everywhere - he decided to buy a house 150 miles away in Nottingham, where he still lives now.
I only got on the property ladder initially myself by buying a place with my father, for him to live in, not me. I couldn't get a mortgage on my own because of high interest rates, and didn't have enough for a deposit. Back in the 1980s and 90s, when we all started out on the property ladder, I really wanted to get a flat to rent, but couldn't as there were very few rental flats available on the private market - the aftermath of rent controls.
Even though buy to let is a really good investment, it can be tough for landlords too. I started out as a landlord by letting my former home, ended up living as a lodger, then struggled to rent a flat in a cheaper part of the country that I still couldn't really afford as my live in landlord decided she didn't really want a lodger so I was forced to move out - this is far from a unique experience amongst landlords.

Mark Alexander - Founder of Property118 View Profile

17:53 PM, 2nd May 2014, About 8 years ago

Reply to the comment left by "Mandy Thomson" at "02/05/2014 - 17:09":

Thank you for sharing your story Mandy, mine is here >>> http://www.property118.com/my-first-buy-to-let-property-investment/
.

Simon Whaley

20:47 PM, 2nd May 2014, About 8 years ago

Mark , I posted this on private landlord directory yesterday and as I have said for years and the overwhelming majority of self managing landlords who lets not forget at fifty percent of the overall market agree it is the letting agent fees that cause tenants most problems ,as said below however if these labour proposals ever come to pass then it may increase my revenue .

Being one of those who self manage lets see the pros and cons .

Fees to tenants , I don't charge any other than a minimal credit check fee £20 and a small admin fee at the start of the tenancy £30 I can stand this as I have very little churn so won't miss that too much
Tenants will be a lot better off saving an average of a months rent in agency fees
Letting agents will be screaming as the old farming expression goes ' like a stuck pig ' as they will no longer be able to soak tenants .

Longer tenancies , brilliant any landlord who does not want tenants in for a long period is frankly barmy! About half of mine have been in longer than that anyway and landlords do not want voids where we are making nothing .
Tenants will be happier and have a better sense of security
Letting agents, here's that pig coming along again! Agents love churn it makes more money in fees from both tenants AND landlords who use them.

Rent control , I have always worked on the principle keeping the rents a little lower keeps people in reduces the voids and the turn around costs and overall maximises my profit
Tenants once again a measure of inflation plus ..... Annual rent reviews based on a specific area is no bad thing and enables tenants to plan ahead it would be a simple add on function of the valuation office in a similar way to LHA
Letting agents total reversal of above ,if they squeeze another hundred quid a month out of tenants then they get a greater proportion of the overall rent from the landlord using them ,so what if the tenants leave after six months it creates more churn fees from new tenants and the landlord has lost the extra money he thought he had gained because of this .

So for the millions of self managing landlords this is not a great worry , agents will say oh but rents will go up as all the fees will be passed onto the landlords using them , great ! Yet another competitive advantage I will have.

Jeremy Smith

1:07 AM, 3rd May 2014, About 8 years ago

MY story...

I had 4 lodgers in a two bedroom, two up two down house, and I moved out into the shed so I could pay the 15% mortgage rates at the time.....
(my neighbour was working 80 hours a week driving lorries and had 4 lodgers and was sleeping in the shed too!!)

...I managed to hang on to my first house, and when the rates came down a bit I bought the house next door, which was derelict. I slept on the ground floor (holes in upstairs ceiling and roof) on a mattress on the floor, and rented out my first house next door to pay the mortgage.

I'm sure it's the same now, those who will not do what it takes and want it given on a plate will have to continue to rent, although I wouldn't wish these extremes on anyone now !!

Somehow it should be the Deed of Assurance, as the key and the answer to the problem of insecurity for tenants.
Any good landlord would want tenants for as long as they can keep them, compulsory 3 year tenancies are not the answer, no-one knows how the 'relationship' will develop.

Jeremy Smith

1:21 AM, 3rd May 2014, About 8 years ago

They've closed the Poll already !!

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