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

18:40 PM, 17th May 2014, About 8 years ago

The current problem for the housing market be it rented or owned is lack of supply. Everything stems from that.

Recently this has been exacerbated by the credit/banking crisis which we are still trying to recover from.

The problem is making simplistic political statements with no reference to the very fundamental basics of how supply and demand affects prices. I just find the whole thing tragic and depressing for my country.

Gareth

19:46 PM, 17th May 2014, About 8 years ago

Reply to the comment left by "Neil Patterson" at "17/05/2014 - 18:40":

"Hear, hear" Neil.

Gareth

19:46 PM, 17th May 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "17/05/2014 - 17:52":

"Hear, hear" Mark.

david dahill

8:38 AM, 18th May 2014, About 8 years ago

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

Neil,I would absolutely love it if we could adopt the same profile as tesco. When you fail to pay for goods at tesco , you cant keep them or be allowed to smash them up in the car park. The council will not then advise you and assist you to keep your freebies until a bailiff takes them off you, so you can "purchase" elsewhere. I love the idea of using different countries/ businesses models of landlording. Like America, dont pay your rent there and the police will assist in throwing you out, none of this 6 months of court nonsense. Give me that option as a landlord and Ill sign people up for twenty years. I need to have some surety. Bear in mind I am giving out a hugely expensive asset with damage and cost liabilities that can run into tens of thousands of pounds. With the current usless system of eviction I am not tempted by long tenancy agreements, thanks.

Neil HEWITT

9:27 AM, 18th May 2014, About 8 years ago

Reply to the comment left by "david dahill" at "18/05/2014 - 08:38":

David,
My article actually also supported landlords, as I have seen at first hand 'accidental' landlords who have been virtually made bankrupt by supposedly good tenants. One friend lost £20,000, and her only home due to a cousin who wrecked her home. Another business model would actually strengthen the rights for both tenants, and landlords.
One issue that does matter, irrespective of the cost of the asset, is that the tenant regards the place as a home. And, should be entitled to call it home. Many landlords do not respect that.
I have seen the viewpoint from both tenant, landlord, and also the legislative perspective. I work with landlords frequently. There are major problems with the UK rental sector, and remedying these will aid not just tenants, but landlords as well. I put it to any landlord on this site, how would they feel if they had to move home four times in two years, through no fault of their own.
Regrettably, the posts from landlords on here only serve to reflect the recalcitrant attitude of the landlord and lettings sector, that tenants are often treated as a sub species, and that attitude in itself then creates a them and us attitude between tenant and landlord. That leads rapidly to 'issues', and which often can be prevented by treating the tenants as humans, and that those tenants, treat the landlord with respect.
If legislation is introduced, then there is always a reason why, and often it is because that industry that it applies to, cannot clean up it's own practices. We have seen it in the press industry, and regrettably, the same applies to the lettings industry.
So landlords, prove that you run your business in a fair and ethical manner, that you are capable of sourcing decent tenants, for your properties, working people who do not smash up your properties. This is your business model, who are you aiming at? I hate to say it, but if low grade/low cost properties are the mainstay of your business, then associated risks will result. Provide the right type of property, and the right type of tenant will come.

Mark Alexander - Founder of Property118 View Profile

9:54 AM, 18th May 2014, About 8 years ago

Reply to the comment left by "Neil HEWITT" at "18/05/2014 - 09:27":

Neil, I offer my tenants a "Deed of Assurance", please Google it.

Nevertheless, I am very much against the Labour proposals for the reasons stated.

You have not addressed the point I have made about how strangling capitalism will help the market, or indeed the housing crisis and associated supply issues that governments have failed to address - please do so. I will welcome to response to this.

Just because I disagree with you, and the Labour government, does not make me a bad landlord. Again I refer you to the "Deed of Assurance" I give to my tenants.

Socialism doesn't work - it's proven. Lennin had millions of capitalists killed, Stalin even more. We know what the outcome of that was don't we?

Sadly, many mistreated tenants blame landlords. This is all propaganda. Yes it's really happening, that I do not deny, however, to solve a problem one must focus on the cause of the problem. The cause in this instance is the massive under-supply of housing. Governments are failing to address this very obvious point and are seeking to blame capitalist landlords for the problem as opposed to blaming themselves for causing the problem. It saddens me that many of the British electorate continually fail to see though this BS propaganda.
.

Mandy Thomson

10:45 AM, 18th May 2014, About 8 years ago

Reply to the comment left by "Mark Alexander" at "18/05/2014 - 09:54":

Absolutely spot on, Mark. Leaving the credit crunch and its aftermath aside, the reasons behind lack of housing supply in the UK are complex and varied.
In addition to a massive rogue tenant problem, there is (as we know) a corresponding rogue and "accidental" landlord problem - very few, if any, of the landlords who regularly visit this and other landlord advice sites will fall into these categories, as they actually WANT to be landlords, or at least want to it properly. Unfortunately, no one in local or even national government seems to want to really address the bad tenant/bad landlord issue, only to exploit it for political and revenue raising gains. Sadly, even certain housing charities are following their lead...

Gareth

10:51 AM, 18th May 2014, About 8 years ago

Reply to the comment left by "david dahill" at "18/05/2014 - 08:38":

Well said David. I love the idea of the Tesco big business model in that sense too. The private rental sector is in no way a level playing field. All is skewed towards the tenant in most situations.

Gareth

11:03 AM, 18th May 2014, About 8 years ago

Neil.

If the Government want more houses and flats they are more than welcome to buy mine for current market value with a sweetener of zero CGT payable by me and I would then be happy to sell the properties and leave them to manage the tenants any way they see fit. They could give the tenants lifetime contracts for £50 per week for all I care! They wouldn't make any money or even pay the expenses of the house but it wouldn't matter as they don't have mortgages to pay for. They can buy outright in cash.

I need these properties to supplement derisory pension benefits. I have to support myself and my family too somehow and property is one of the best ways of doing this as I am sure you know. I make no apologies for that. To make a pension income of £100,000 per annum I need £3,333,333 capital in a bank earning say 3% per annum, whereas if I pay off my mortgages of say £750,000 I get the same income. No brainer really.

Devon Landlord

21:00 PM, 27th May 2014, About 8 years ago

Ed Milliband is foolish if he thinks that landlords in the private sector will be forced into situations that compromise their financial viability. We know that the 'Westminster Village' is divorced from reality but does he really think that he can legislate to achieve such a stupid sound bite? He will have to change contract law and persuade other members in the 'House' to vote for it. The fall out from such a stupid action could be catastrophic for housing availability as currently, in a situation where there is a severe undersupply of properties the housing market relies on the PRS to meet its needs. How will all those immigrants that Labour welcomed in with open doors and arms be housed let alone our own expanding population?

Apart from the issue of who will police this stupid piece of legislation if it were ever to come about, how will the local authorities react when landlords en-mass remove their properties from the letting market and go underground. Let us be honest. I would be very happy to let for three years at a decent market rent which enabled me to meet my debts and make a good profit. Indeed, when I look at my own portfolio, all my tenants have been in situe for more than three years and I have no problem with it. What I do have a problem with is the fact that it takes six months to get rid of a tenant because of the time it takes the Courts to deal with even simple issues and the 'rights that tenants have' to spin the inevitable out before they are evicted. The whole process is designed to give the Courts and the legal system a job, it seems to me. What we need is a situation where the tenant or the landlord can say I want to leave or I want you to leave and the whole thing is completed in three weeks, done and dusted. The whole thing after all is a business arrangement and when it is not working it should be terminated asap! Now, if Ed the Milliband can come up with something like that he might find one million landlords voting for him rather that against him, but until then Ed, go and bring back your own BIG BROTHER to make a more sensible call!

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