lastlaugh

What is especially interesting about the OP is that the article appears in the Spectator, of all places. A publication traditionally representing the interests of the “freeholder” class.

It’s a funny old thing -these rental statistics. Unlike the sales market, the rental market is 100% dynamic. EVERY month EVERY landlord asks for rent from EVERY tenant. The vast majority of these transactions and agreements take place behind closed doors. There is no Land Registry equivalent. Or banks issuing loans to collect reliable datapoints. And presumably most parties are satisfied with the arrangement, or they would change it? So no-one really knows the average rent at any given time. We can only see the sticker prices in EA windows and property websites. Which only tells a small part of the story, and a fringe part at that - the most greedy or desperate landlords seeking out the most desperate or the most clueless tenants. In my experience of 30 years of renting, the best deals come from informal contacts, that cut out the middlemen and connect reliable tenants with reliable landlords. Everybody is happy. But these deals are never reflected in the statistics. What is also true, is that renters have options. Renters can emigrate, move in with their parents, or partners. Double up on rooms, or move somewhere cheaper. Or squat in their own homes. It’s hard to know what’s really going on in the market right now. But in all my years tracking London Z2/3, I’ve never seen such a high number of rental properties sitting around. Of all sizes. And at such high prices. More desperate landlords starting to run out of desperate tenants.

You have just described the last 15 years……

I haven’t started a new tenancy with a contract less than 2 years in the last 25 years. It takes a bit of effort sniffing out the landlords who value stability with a reliable tenant, and are happy to negotiate the contract to achieve it. But it’s always possible. To the OP, your friends should stay and enjoy living in Notting Hill at the rent they agreed.

You’re right, it’s a total disgrace. In principle. But I think in practice it won’t make much difference to the overall outcome. What possible forbearance will banks grant to BTLers whose equity has disappeared and whose rental income doesn’t cover the IO mortgage payments? I prefer to see a slow painful death of the entire BTL industry, than dramatic implosion that leaves most of them still standing and the industry essentially intact

Despite the other thread, Labour haven’t said they will bail the BTLers out. Despite the wishful thinking from the landlord website you linked to. At worst, Labour want to include BTL mortgages with the proposals for residential mortgages ie. extend the term and move to IO. Given that most BTL mortgages are IO anyway, the proposal is just noise. In practice, it will prolong the agony of BTLers, which has to be a good thing. They will hang on until their equity has disappeared and they are truly busted.

Haha, I was just searching for this thread. You beat me to it.

Double the Rent-A-Room Allowance from £7,500 to £15,000. Kills many birds with one stone. It would: Send a clear message that the solution to mortgage difficulties is in the hands of mortgage payers. Discourage the underuse of property in the UK, which is the root cause of the housing crisis. Would benefit the SE the most, where the housing crisis is most acute, mortgages are the most unaffordable, and the whinging voices are the loudest. Pushback against the BTL brigade bleating that if they exit the sector then people will be homeless. It would cost nothing. I suspect the number of households paying tax on lodgers is 0%. So there would be no reduction in tax receipts, just a change in behaviour. Downside? Nothing!

I’ve noticed this too. Higher LTVs are clearly a significantly higher risk in a distressed market. Who is holding the risk I wonder? I suspect not HSBC. Is this a rerun of the MBS/CDO fiasco in a different form?

This. It’s like the scene in Star Wars in the trash compactor. But without the happy ending. Caught between rising interest rates, falling house prices, and a rent ceiling. Let the games begin!

For sure, rent increases at the top affect the whole market. And rents have increased, no doubt about that. But the sticker prices only tell you what is happening at the edge of the market. Many rentals are agreed before they get to EA windows, before they get to EAs even. Through contacts, personal recommendations, etc. Arguably it’s even more complicated. Given the short term nature of the PRS, I would say 95% of contracts are on short notice in any given year. And all these renters, and landlords, are making decisions to accept the status quo or change it. It’s what makes renting so stressful, right? Are they not active market participants too? Unlike homeowners who don’t move? Given that there is no way of knowing what is happening throughout the market, the sticker prices have to be seen as the upper boundary, not as an average, or even representative. With perhaps housing benefit rates representing the lower boundary? Yet landlords, and their lenders, see the sticker prices as achievable average rents. And BTL business models rely on this. But it only works while there is a supply of price-insensitive renters. Which is why I believe we have seen the paradox of increasing supply of BTL AND increasing rents.

Has there been a significant sell-up of BTL yet? I’m not convinced. I agree that rents have skyrocketed. Certainly the sticker prices. But I don’t find the explanations for that convincing either. The sticker prices only tell a part of the story, and are a misleading price signal. They are, by implication, outliers in the market. Representing the point where the greediest landlords meet the most price-insensitive tenants. A small fraction of the overall market.

It’s a fair question, although a little disingenuous (The original post didn’t mention a massive reduction in supply, just the death of BTL, and not the same thing. But I get your point) To answer the question, the opposite phenomenon needs explaining. Why have rents increased so much, when there has been a massive increase in supply since the 90’s? Certainly the case in London where I’ve been in the rental market for 25 years. I don’t think immigration is the answer, not at these prices. My suspicion is that the price signal is not quite what it seems.

"If Section 21 goes, then I'll sell up my entire portfolio" - Jason Harris-Cohen From about 15.20

Landlords can only end a tenancy through a court order. It was always the case. To use this loophole, a landlord needs to convince a judge who has discretion. Pretty impossible for incorporated landlords. And a very risky manoeuvre for lying scumbags. Either way it will be time consuming and costly. Section 21 is and was the game changer

I was 19 in 1988. I’ve lived just about my entire adult life in the shadow of Section 21, Housing Act (1988). It has been done to death on this forum, but these few, short lines of legislation are the ultimate cause of the horrific state of the UK housing market. All the other evils flow from this. I’ll believe it when I see it, but it’s repeal will be THE game changer

I live in the suburbs of Barcelona. It’s not as easy to move as it used to be. But, as posters above have said, not impossible. There are lots of digital nomads here, from all over the world. And if you can stay within the 90/180 day limit, you don’t even need a visa.

I live and rent in Spain after being priced out of London. I commute to my job in London 3 or 4 times a month. Otherwise I WFH. It was meant to be a short term plan, but 9 years later we are still here and very settled. In those 9 years, rents and house prices have barely moved outside the main cities. Rents are controlled, previously limited to RPI, and now with a 2% cap. Like the UK, landlords are lazy, and don’t maintain or improve their properties. But the relationship between landlords and tenants is fundamentally different. There is no S21 equivalent. In some circumstances, tenancies are secure for 7 years, which is long enough to make life plans, and makes it worth investing in a kitchen, bathroom, or paint job. Unlike the UK, there is a lot of political pressure to kill off the short-term rental market. It’s starting to work in some places. I had hoped to buy at one point, but the sales market is bonkers. Stamp duty is over 10%, there is tax on imputed rent, high IHT and forced heirship rules. Older property is poorly constructed, often incorrectly documented, and hoarded by decaying boomers who refuse to sell for less than the price before the GFC. Meanwhile there is loads of space, empty plots, a declining population, and loads of new construction. A ridiculous golden visa programme of only €500K has distorted the market for the last 10 years, and appears to be drying up as the Russian sanctions kick in and globalisation generally retreats. I’ve spent the deposit I saved over 20 years on a campervan.

Do you have a copy of the Rightmove listing? What does your contract say? I suspect your best course of action is through the Property Ombudsman, bu5 you will need to make a formal complaint to the EA first.

Why are you having 6 monthly inspections? Are they written into your contract? Inspections, where they exist, are for landlords to check the state of repair. The other items you describe, cleanliness, car parking, etc are none of their business. Within reason, of course. What you are describing is not a healthy landlord/tenant relationship, and could be more accurately described as harassment. You have 3 choices. 1. Don’t get distressed about the inspections, shrug them off. Put up with them as a small price to pay to live in such a great place. 2. Move, and find a better landlord/tenant relationship. 3. Reeducate your landlord about the limits of your relationship. Do you have a preference?

The S21 date no longer has to coincide with the rent payment date, it only has to be 2 months notice. However, a common misconception amongst renters is that the S21 date is the date you must leave. Not true. You can leave earlier or later. Both options have implications, however. The only significance of the S21 date is that it is the earliest date that a landlord can commence eviction proceedings against you. So, the best way to view a S21 notice is as a starting gun for a negotiation process to end your tenancy. Clearly, as a tenant your relationship with your landlord is coming to an end and you need to find a new home. Just as clearly, your landlord wants you to leave without a fight and without all the hassle of an eviction. Somewhere in the middle is common ground where both parties are happy. What muddies the waters sometimes is when landlords and agents use the S21 trick as a means to apply pressure on tenants to accept a rental increase. It’s a cruel and stupid trick. I once won considerable compensation from the Ombudsman and ended the career of a Lettings Manager in London who tried to pull this stunt. But that’s another story. The other annoying aspect is that LLs and LAs see the S21 date as the date you must leave, make plans around it, and will harass you if you believe otherwise. **Remember fellow Renters, there is only one date that you MUST leave your home, and that is the date set by a judge in an eviction notice. Everything else is open to negotiation.** So what is the best way to deal with the situation in the OP? S21 date is the 13th, but rent payment date is the 30th? Well this is quite a good position for a tenant because the landlord expects you to do two conflicting things. You are contractually required to pay a full months rent on the 30th, but your landlord requires you to leave on the 13th without saying how he plans to account for the service you have paid for but he plans to not provide. This gives you room to manoeuvre. Firstly, don’t respond to the S21. Don’t contact your LA or LL. Don’t acknowledge or return calls or emails. Nothing. Zip. Nada. It buys you time. Because, first you need to check out out other accommodation options. Usually, it would help to have a little bit longer in your current accommodation, but sometimes it helps to move fast. If you can, and want to, move fast, then great, give them one months notice, leave, and enjoy the rest of your life. Usually the process of finding a new suitable place, arranging contracts etc, and a new move in date, takes a little time, so in all likelihood you might need a little extra time in your old place. When you have a plan worked out then, and only then, acknowledge the S21 and INFORM the LA or LL in writing of your moving out date. If this is a week or two after your S21 date, then there is nothing they can do about it. They might huff and puff. But bad luck! The only possible downside is the LL or LA might try and claim costs against you for staying beyond your S21 date. But it’s difficult to prove and is not covered by your deposit. Also, if you have formally given sufficient notice of your leaving date, AND paid rent, then there is no reason they should have incurred any costs anyway. The bottom line is this. If a LA really is stupid enough to give a S21 date different to the rent date, then they will look even more foolish if they try and claim costs from you because you stayed until the end of the period for which they have asked you to pay. Anyway, good luck with it all. The end of a tenacy is always much more stressful than the start.

The truth, as we know on this forum, is that the fees are a form of extortion, which the change in the law duly recognises. Up until the change in the law, the normal process would have been - apply pressure to renew the contract, then the tenant pays the fees in order to get the new contract. Your LA has got it the wrong way around. Once the contract has been issued, even with unpaid fees, then the LA has lost their leverage, at least for the length of the new contract. At the very least, make them work for the money. Ask them for a complete breakdown of everything that you owe and all the supporting documentation relating to the fees. Ask them to justify exactly why they chose to issue new contracts, when the law doesn’t require it and never has. There was never a need for a new contract, even when the rent had changed. If they have issued new contracts issued while already in arrears for fees, ask them to fully explain why. Appear to be reasonable and explain you are happy to pay up once you have a full explanation of all of the above. Should you go to court, you will need to be asking all these questions anyway. And they can’t, or at least shouldn’t, take you to court until they have properly explained to you why you owe them the money. A small claim like this isn’t worth the effort of a small business or a debt collection agency, especially because tenancy law is more complicated than a simple contract. My bet is, if you put enough obstacles in their way, they will give up.

But that paper, by painting a rosier picture of the robustness of the BTL market is making a case for the exact opposite. Directly or indirectly.

Well, the BOE is a public body, using public funds. Any research they do is to inform or support policy decisions. Their conclusion is, and I quote: “Our main result shows that, adjusting for affordability, the loan-to-value ratio is reliably more important for borrower distress in the OO market than for distress in the BTL market, contradicting McCann’s (2014) results.” The conclusion contradicts previous research and the general theme of this thread. And I think the conclusion relies entirely on a false assumption, namely: “Everything else equal, a BTL borrower is more likely to be able to withdraw equity from at least one of their properties, and use these funds to cross-subsidize other properties, if necessary.” I don’t think the assumption stands up to scrutiny.

I’m not really sure of the purpose of the paper. Why was the paper commisioned? Why is the BOE looking for evidence that the BTL sector can survive a modest HPC?