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Frank Hovis

Rent Controls

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And sure as night follows day a Landlords' trade body says they would be a "disaster for tenants" in the same way that they said the change in tax rules would be.

What absolute ullage.

These both presuppose that:

- People actively want to permanently rent

- Landlords can set their rents irrespective of the market rent

 

The fact is that as every house purchased by a BTLer put up house prices and took one more possible owner occupied home out of the market, so every house sold by a BTLer pushes down prices and gives a renter a home to buy.

So the number of people wanting to rent will decrease as homes they can afford come up for sale and they switch to being owners.

 

This was the So-Called BBC giving oxygen to this; any change that is actually bad news for landlords generates a press release saying it's actually bad news for tenants and the So-Called BBC, with all its London journos up to their necks in BTL, gives it headline status.

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Rent controls are bad news for tenants. They've never worked. France has abandoned its short lived experiment in rent controls due to the problems they caused.

When a politician thinks they know the price of something better than the market you have a problem.

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Rent controls are almost always a disaster wherever they are tried.

If you go to Porto or Lisbon and wonder why there are abandoned buildings in some of the best locations in the city the answer is rent controls. It's just not worth doing them up and renting them out, so they sit on them hoping for a change in the law one day.

Edited by xyz

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1 hour ago, davidg said:

Rent controls are bad news for tenants. They've never worked. France has abandoned its short lived experiment in rent controls due to the problems they caused.

When a politician thinks they know the price of something better than the market you have a problem.

Ah, but the same argument can be applied for financial support for the landlords.  Rent controls are needed to be the countering force to this support.

The one thing we won't get is a free market.

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25 minutes ago, Green Devil said:

Surely security of tenure is far more important than any control of rent (which is set by market forces - ie supply and demand).

Although convinced of a coming HPC I bought this Summer because of the lack of security of tenure. This was our 4th move in 2 years and just wasn't fair to the kids.

#nowaytoraiseafamily

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1 hour ago, Horrified Onlooker said:

Although convinced of a coming HPC I bought this Summer because of the lack of security of tenure. This was our 4th move in 2 years and just wasn't fair to the kids.

#nowaytoraiseafamily

It doesn't matter what a home is worth once bought, unless you want to realise the assets and cash in.  My house in London is worth mega bucks. It is meaningless as where would I live if sold?  If the price halved or dropped to nothing, it really would not make any difference whatsoever. 

Just enjoy and don't worry about what it is 'worth' 

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1 hour ago, One percent said:

It doesn't matter what a home is worth once bought, unless you want to realise the assets and cash in.  My house in London is worth mega bucks. It is meaningless as where would I live if sold?  If the price halved or dropped to nothing, it really would not make any difference whatsoever. 

Just enjoy and don't worry about what it is 'worth' 

I made no reference to 'worth'. I simply believe that I could get better value by holding off buying. However I rate my children's childhoods above money, and so I bought to give them stability.

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3 hours ago, Horrified Onlooker said:

Although convinced of a coming HPC I bought this Summer because of the lack of security of tenure. This was our 4th move in 2 years and just wasn't fair to the kids.

#nowaytoraiseafamily

Most european country dont allow a landlord to evict a tenant.

And people are willing to rent long term. Funny that. We are behind the curve. Prolly because most of the politicans are full loaded BTL scumlords.

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The problem is that it is not a free market. But not in the way people think.

If I want rent limited to inflationary increase and a five year tenancy then I will negotiate it. I will find a LL that wants the same thing. Which is exactly what i have done.

The problem is that banks won't allow the landlords to negotiate that deal. They are restricted to a one year tenancy.

Legislate that banks must allow longer tenancies is the way to fix the problem.

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2 minutes ago, Green Devil said:

Most european country dont allow a landlord to evict a tenant.

And people are willing to rent long term. Funny that. We are behind the curve. Prolly because most of the politicans are full loaded BTL scumlords.

For many years I have found it odd that when it comes to most contracts, 'business' isn't really allowed to muck about with the smallprint so that they get around the law -- if challenged, the courts will often say that the business has not complied with the intention of the law.  For example, wrt their workers, employers aren't allowed to do things like employ people for 364 days, then re-employ them for another 364 days, so that they get around normal short-term vs long-term worker law.  Yet landlords are allowed to offer rolling short (ast) leases (12 months) to get around the obligations they'd have under the law for longer term leases (regulated tenancies).   I don't understand how the consumer can be denied their rights* by this mechanism in just this particular field.

[* Sure, some tenants would prefer AST, as is always argued by landlords.  Fine.  Let those ones not contest their tenancies when the time comes]

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4 minutes ago, Green Devil said:

Most european country dont allow a landlord to evict a tenant.

And people are willing to rent long term. Funny that. We are behind the curve. Prolly because most of the politicans are full loaded BTL scumlords.

If supply was greater than demand, this wouldn't matter because they would be keen to keep tenants. The law is not the problem, as Sarah said above, it's the supply/demand ratio.

But to improve that ratio, not even building will work on it's own, while Tax Credits and HB are still available to immigrants form the EU they'll continue to come to the UK and will need housing.

Reduced immigration AND a massive building programme on a scale that has never been seen since after WW2 is what is required. 

 

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6 minutes ago, swissy_fit said:

If supply was greater than demand, this wouldn't matter because they would be keen to keep tenants. The law is not the problem, as Sarah said above, it's the supply/demand ratio.

But to improve that ratio, not even building will work on it's own, while Tax Credits and HB are still available to immigrants form the EU they'll continue to come to the UK and will need housing.

Reduced immigration AND a massive building programme on a scale that has never been seen since after WW2 is what is required. 

 

I don't believe there is a shortage of housing. There is an excess of credit.

The standard answer is that we need to build more affordable housing. For the lucky few. No. We need to make all housing affordable for the many. And the only possible way to do that is a house price crash but tptb are still too scared to say it.

I can guarantee that no matter how much affordable housing they build, I will never be given the option to buy one.

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52 minutes ago, Cunning Plan said:

I don't believe there is a shortage of housing. There is an excess of credit.

The standard answer is that we need to build more affordable housing. For the lucky few. No. We need to make all housing affordable for the many. And the only possible way to do that is a house price crash but tptb are still too scared to say it.

I can guarantee that no matter how much affordable housing they build, I will never be given the option to buy one.

I didn't say build affordable housing, just build housing. (and infrastructure). Lots of it. Including lots of social housing that is NOT for sale, repeal those laws. No point in doing it until the TCs and HB and immigration situation is sorted though, it would just be used to house more Roma and Somalis.

If supply exceeds demand, or at least demand doesn't exceed supply by so much, prices will fall. This needs to happen. The price of money as you say is also key, but if you force prices down by raising that too much, many will lose their homes, it would be better if they can keep them, even their value is no longer what they paid for them.

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4 minutes ago, swissy_fit said:

I didn't say build affordable housing, just build housing. (and infrastructure). Lots of it. Including lots of social housing that is NOT for sale, repeal those laws. No point in doing it until the TCs and HB and immigration situation is sorted though, it would just be used to house more Roma and Somalis.

If supply exceeds demand, or at least demand doesn't exceed supply by so much, prices will fall. This needs to happen. The price of money as you say is also key, but if you force prices down by raising that too much, many will lose their homes, it would be better if they can keep them, even their value is no longer what they paid for them.

I said the availability of credit, not the cost, was key.

If you remove io loans from landlords and maintain mmr then interest rates do not need to rise to create hpc. Many will end up in negative equity but will still be able to afford the payments.

The issue is a misallocation rather than a shortage of housing. Forever hpc encourages hoarding.

Next to me is a row of four terraced houses (actual address is 'council cottages') All originally 2 bed but now three.

Nearest house has two parents and four kids, aged 17-24.

Next is two parents, their two late twenties daughters, boyfriend and husband and two grandkids. Third is rented as a school catchment con to a family from a big house in Sunningdale and the fourth is a single old dear.

So in total, 12 bedrooms, 15 people. On average fine. In reality not so good for some.

There are some 2,500 houses in my 'village', nearly all 3 or 4 bedroom. Yet the population is only 5,500. 

 

 

 

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To add. I do agree with building a lot of social housing. And most of it in the so-called wealthy areas. The land rich haven't realised it yet but they have pretty much priced out all the people they rely on to keep them in their pampered lifestyles.

And then they moan about the traffic, most of which is caused because they can only get a gardener that has to travel 30 miles to get to them.

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17 hours ago, dgul said:

Ah, but the same argument can be applied for financial support for the landlords.  Rent controls are needed to be the countering force to this support.

The one thing we won't get is a free market.

I don't believe in financial support for landlords, but two wrongs don't make good economic policy. It is not a countering force but of the same.

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11 hours ago, Green Devil said:

Most european country dont allow a landlord to evict a tenant.

And people are willing to rent long term. Funny that. We are behind the curve. Prolly because most of the politicans are full loaded BTL scumlords.

France is moving towards a UK style short term letting system because only the most gilt edged of renters can find anywhere to rent. Be careful what you wish for with long term contracts.

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No housing benefit for non UK citizens would reduce rents greatly...

Most landlords are renting out a handful of properties. If you brought in legislation giving security of tenure landlords would simply stop renting their properties....why would they rent out a house if they might need to sell it soon? What the country really needs is large professional landlords that own entire blocks of flats.

I don't see why landlords are demonised so much. There is a demand from people that need a house for a couple of years. I work in construction and follow the work around like an itinerant fruit picker. Or maybe I should just buy a place wherever I work?

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1 hour ago, davidg said:

France is moving towards a UK style short term letting system because only the most gilt edged of renters can find anywhere to rent. Be careful what you wish for with long term contracts.

Errr? 

Europe\germany\switz  has a policy where the landlord can't evict the tenant for no reason. Unless he doesn't pay rent or causes nuisance.

Tenant gives 3 months notice.

What's wrong with that?

Security of tenure gives control to tenant where it should be (not with the btl scumbag).

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11 minutes ago, Green Devil said:

Errr? 

Europe\germany\switz  has a policy where the landlord can't evict the tenant for no reason. Unless he doesn't pay rent or causes nuisance.

Tenant gives 3 months notice.

What's wrong with that?

Security of tenure gives control to tenant where it should be (not with the btl scumbag).

In France the tenants don't pay and it takes a very very long time to evict them. Great, you may say, yah boo sucks to filthy landlords, but the effect in the market is that landlords won't accept most tenants. Law of unintended consequences. Hence the changes in the pipeline.

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