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

Sharon Betton

10:56 AM, 9th May 2014, About 8 years ago

As usual, the tenant can sign-up for a 3-year tenancy but give only 1 months' notice, so good for the tenant, whereas the landlord has to have a ground for s.8 or stick with a 3 yearer. Very surprised at the comments made about length of tenancies - most of our landlords have no wish to end tenancies; many, many can testify to tenants staying 5, 10 or more years; one landlord recently celebrated a 25 year tenancy, with cake and gifts to the tenant! A good and caring landlord, yet he must have the chance to change his mind after 6 months. We all know that there are reasons why after 6 months, irrespective of paying the rent on time, the tenant who refuses access, who make continual calls in the early hours of the morning, speak unpleasantly - is that a good landlord/tenant relationship? No and the landlord is within his rights to want possession and the opportunity to find a tenant that appreciates a decent landlord and decent property.

Farah Damji

8:11 AM, 12th May 2014, About 8 years ago

Complete and utter foolishness by the out of touch party. Labour just doesn't get business or free market economics. He lost a million landlord votes but he also lost the votes of countless people who dream of owing property, and see it as an aspiration, not something to be punished for. It's very English; this contradiction in terms of resenting property ownership and being resentful and jealous.

When will Labour and other governments learn that it is not the responsibility of the PRS to house people in need of social housing. The £25 bn yearly housing benefit bill could fund millions of new homes and would serve to deflate the rental market.

Not really rocket science is it...

Matt Wardman

9:36 AM, 12th May 2014, About 8 years ago

I think MIllicent is playing to the gallery and the campiaigners , as per usual - the man is a true political appendix.

See his "2 year freeze of sky high energy prices". a) They weren't and aren't sky high - we were and are well below EU average (ie privatisation has worked). b) The market was already offering 3 year fixes before he started.

Here he's grabbed an idea from Germany (2nd gen rent control) without the bits that make it work - an adequate housing supply (2.5x uk per pop newbuild) and a functioning market (pool of empties: 1.8m).

Longer term default tenancies are no problem in themselves as long as he doesn't wreck the market, which means sweating the detail (eg how will he keep people on 1 yr contracts abroad renting out?).

I don't think Millicent does detail.

If he wants to reduce rents he needs to look at the Licensing trainwreck, which has come from the last time Labour had an attack of regulationitis. We are up to about 4 or 5 independent reports showing that it does not achieve its objectives as a widespread measure.

He also needs to look at students being forced into institutions at £1000-1500 a year extra cost over the PRS.

Michael Barnes

12:22 PM, 12th May 2014, About 8 years ago

Reply to the comment left by "Farah Damji" at "12/05/2014 - 08:11":

I think you have got this wrong.

As policy it is poor.

As electioneering it is good.

He hasn't lost one million landlord votes because there are not one million that would have voted for Labour before this.

He has not lost the votes of those who want to own property because most of those just want to own their own home. The vast majority will not analyse what he has said, but just have the knee jerk reaction of "landlords are bad; labour will hit landlords; therefore they get my vote".

david dahill

7:55 AM, 15th May 2014, About 8 years ago

It also assumes that tenants WANT a 5 year liability, My tenants include contract workers on limited term contracts, rooming houses where flexibility is ALL they want, husbands from marital splits (with no clue how long they want to stay), migrant workers, and people who want to save up and buy their own place. None of whom want to commit to this arbitrary and ridiculous 5 year tenancy
As a landlord I am assumed to be a maniac, I understand this. Given a tenant who looks after a house and pays the rent I will of course evict them wherever possible to create a financial hole in my accounts and take on an unknown new tenant because the powers of eviction are so strong.
I have never in 22 years of landlording evicted someone because I wanted to up the rent. I have tried on occasion to evict those who are non payers, damaging the property, acting illegally and on one occasion keeping a horse inside a two bed house. I didnt find any of these evictions easy or straightforward to the point where I would willingly throw someone out for a little extra rent.
This proposed legislation is just plain nuts.

Mandy Thomson

8:34 AM, 15th May 2014, About 8 years ago

The point is that Ed Miliband is proposing what most landlords do anyway - long term tenancies, rents rising no more often than once a year (current legislation anyway) and only by a limited amount (IF we raise the rent at all - I personally believe my tenants pay me enough already - even though I could use more money!). As other posters have said, no decent landlord evicts or raises rent without very good reason - he conveniently sweeps this fact under the carpet! He also fails to grasp, or doesn't care, that his proposed legislation would damage the delicate equilibrium of the private housing market - scaring away both landlords and lenders, leading to an even worse housing shortage.
As we all know, bad landlords simply flout the law and get away with it - I was looking at rogue landlord convictions on Shelter's website yesterday - there have been very few.

Neil HEWITT

16:56 PM, 17th May 2014, About 8 years ago

I support Labour on this one, as a professional working tenant for two years, I have twice been served a s21, once when it was alleged that the house would be sold, it is now let and not sold, and next when the landlord served a s21 when I complained about certain repairs. It has been relet with the same agent. I have been an excellent tenant and the rent paid on time, I am a professional RICS building surveyor by the way. Sorry, I have little sympathy with private landlords, or agents. For too long the lettings markets has run loose, and as often happens in such a situation, controls need to be introduced, and they are needed desperately. What will happen with the market when interest rates rise soon, many properties will no longer be viable as a business due to BTL. There are far too many accidental landlords, and I have known a few who have lost thousands due to problem tenants. I do not so much blame those tenants, but the approach of the whole lettings industry that encourages such owners to let out a property, with no business acumen, or know how.
Rents are too high in many areas, and not affordable for many people, there is no security of tenancy, and landlords evict as a policy to try to increase the rent. As an industry, it has lost consumer confidence, not just my viewpoint, but that of many people, and that of the far greater number of tenants, who face increasing rents, inability to obtain a personal loan, which encourages short term loans using 'Wonga' style companies, and no security of tenure.
Labour does get my vote, for these reasons alone. Landlords who object to my comments, please actually try living as a tenant, and see how you feel then.

Gareth

17:25 PM, 17th May 2014, About 8 years ago

I object to some of your comments Neil. Others are reasonable/understandable.

However I would counter with why don't you try living as a homeowner, then you wouldn't have to put up with all this.

Since you are a working professional I am surprised you aren't a homeowner already.

Neil HEWITT

17:36 PM, 17th May 2014, About 8 years ago

Reply to the comment left by "Gareth Thomas" at "17/05/2014 - 17:25":

Gareth,
Many people have a change of circumstances in life, that forces them into rented. I have in fact been a homeowner, and paid off a mortgage. The fact that you do state 'put up with all this' does confirm you biased attitude against tenants, and demonstrates the unprofessional attitude of some landlords.
There should be a choice, as there is in other countries, between affordable rented, with safeguards for both tenant and landlord, and to buy a property. Gareth, please assess how the property market works in other countries, before you attempt to condemn an individual in this country.
One major issue in The UK, is that the lettings industry is too fragmented, there needs to be much larger private landlords, who operate in a professional manner, and within legislative and approved codes of practice. That is the model in Germany.
Your attitude reflects the attitude of many private landlords in The UK, 'accept it or get stuffed'. If Tesco operated like that, they would lose customers, take an example from big business, and operate ethically and morally, adopt a sensible, legal, moral and sustainable business model, and that business will grow, not just short term, but as a long term investment. The latter is a relevant statement, if property were such a 'good investment', then why have not financial institutions actually invested in residential property. The reasons include that the model of private letting is not sustainable in The UK.

Mark Alexander - Founder of Property118 View Profile

17:52 PM, 17th May 2014, About 8 years ago

Reply to the comment left by "Neil HEWITT" at "17/05/2014 - 17:36":

Neil, the lack of "choice" is not the fault of landlords. You could argue that Maggie Thatcher started the problem by helping Council tenants to become home-owners when she introduced Right to Buy. However, successive governments from all parties have done nothing to restore the balance or to deal effectively with the housing crisis.

To have choice and reduce values/demand, which always go hand in hand, it is up to governments in increase the supply of affordable housing.

Mistreating capitalism will not solve the problem but could very easily create one.
.

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