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Labour Will Cap Rent Rises !

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Just say on the BBc...something along the lines of labour will cap rent increase.

Well there's a thing...all I heard was labour will allow rents to rise.

how about:

FORCE DOWN RENTS YOU BUNCH OF IDIOTS EVERYONE IS SKINT.

Another great reason to vote UKIP.

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As currently highlighted, I can't see Labour's proposals achieving much.

Letting Agents' charges will be passed from tenant to landlord in some form. In turn landlords will then up the rent.

Who is going to police this. Landlord registration already exists in Scotland but the council staff in my area either do not have the staff or inclination to investigate those who have not registered. It is the same for multiple occupancy.

Labour are proposing an initial 6 month satisfaction period for the let with automatic extension by another 30 months. Will we then have a 6 monthly turnover to avoid the 'mandatory' 3 year lease?

It appears that they have not thought this all through before rushing to publicise the scheme.

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As currently highlighted, I can't see Labour's proposals achieving much.

Letting Agents' charges will be passed from tenant to landlord in some form. In turn landlords will then up the rent.

Who is going to police this. Landlord registration already exists in Scotland but the council staff in my area either do not have the staff or inclination to investigate those who have not registered. It is the same for multiple occupancy.

Labour are proposing an initial 6 month satisfaction period for the let with automatic extension by another 30 months. Will we then have a 6 monthly turnover to avoid the 'mandatory' 3 year lease?

It appears that they have not thought this all through before rushing to publicise the scheme.

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It appears that they have not thought this all through before rushing to publicise the scheme.

They've most certainly thought this thorough. Call me a cynic but I'd be willing to bet my next ten rent cheques that this scheme has been fully blessed by the BTL 'entrepreneurs' witin their ranks.

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As currently highlighted, I can't see Labour's proposals achieving much.

Letting Agents' charges will be passed from tenant to landlord in some form. In turn landlords will then up the rent.

Who is going to police this. Landlord registration already exists in Scotland but the council staff in my area either do not have the staff or inclination to investigate those who have not registered. It is the same for multiple occupancy.

Labour are proposing an initial 6 month satisfaction period for the let with automatic extension by another 30 months. Will we then have a 6 monthly turnover to avoid the 'mandatory' 3 year lease?

It appears that they have not thought this all through before rushing to publicise the scheme.

I don't doubt that, like so many politically driven schemes and ideas dreamed up in haste, that the typically more astute and canny business minded landlords will pick holes and find loopholes in whatever initial proposals are put forward......

BUT I think the key point here, for the moment, is that at least the proposals are well intentioned and a de facto acknowledgement that cost of renting and lack of security in renting is becoming a major social issue. For that they deserve some credit.

Personally It has puzzled me that some attempt to offer greater security of tenure to renters has not been made beforehand. It is not beyond the wit of man to construct a framework of rules that could make the current landlord-renter scales more equally balanced.

For example, at present an AST gives the first 6 months as a minimum and thereafter typically 1 monthly thereafter with 2 months notice only from the landlord. Obviously not conducive to long term family planning, etc.

As a first step alternative how about something like this......

Renters given an initial 6 months as is presently the case. Subject to good behaviour and no damage incurred, etc then at the end of the 6 months, if the tenants want to stay, the landlord becomes legally obliged to offer the next lease of 30 months duration. BUT.....the tenant retains the right to leave earlier than this without penalty subject to some reasonable notice period to the landlord (say, 3 months?). Not unreasonable in return for the longer period of security the landlord is offering. If they leave in less than the notice period there could be some sliding scale of penalty owed to the landlord, i.e the shorter the notice the bigger the penalty.

Similarly, in return for the landlord getting peace of mind of uninterrupted flow of rental income for extended periods, the landlord will be obliged to keep the future rents limited to some pre-agreed formula - rather than at present where they can charge whatever they may feel like.

People may reply that there is nothing in law to stop a landlord agreeing to a long term multi-year rental contract at present, with all these various terms and clauses and conditions included. The point I make however is that such arrangements are, I believe, to be regarded as normal and not special. Requiring landlords to comply to such standards and expectations will have the effect of removing from the market a lot of greedy cowboy landlords whose financial planning is never further than the end of the month - and shift the balance back towards more responsible longer term outlook professional landlords?

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As currently highlighted, I can't see Labour's proposals achieving much.

Letting Agents' charges will be passed from tenant to landlord in some form. In turn landlords will then up the rent.

Are you sure thats how it works?

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If it was a cap with teeth it would reduce supply. If it doesn't have teeth it would have no effect.

The solution to government meddling is not more government meddling.

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the landlord will be obliged to keep the future rents limited to some pre-agreed formula - rather than at present where they can charge whatever they may feel like.

A landlord can charge whatever the market will support, not a penny more. I've never put up the rent of a sitting tenant, and I can tell you that where I have property (Bournemouth) rents have increased about 20-25% since the late 1990s so wouldn't appear on any rent-cappers radar.

I general tenants don't want longer contracts (even if some stay for years) in exchange for a longer notice period. I always offer 12 months rather than 6 (with 1 month notice after the 6 months are up) and have only once had someone take me up on it. YMMV of course.

Even in countries where 3 year contracts are normal (like the European renting paradise people on HPC talk about) there are usually get out clauses which means you can evict tenants sooner if you wish.

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Bless the Labour party - the answer to almost every question is yet more regulation. Sadly they fail to realise that history judges these regulations by their fruit and entirely forgets the original intention. Thus they make themselves determined but unwitting hostages to the law of unintended consequences. If life is kind then the policy may get forgotten before they actually reach power.

The unintended consequence here could, I suspect, involve pushing BTL landlords into bankruptcy and their tenants onto the street in vast numbers. This would require a certain blend of inflation, deflation and rent caps. Of course these circumstances could never occur - well not for the next 18 months anyway according to all respectable commentators.

Think I am having a yellow day or is it just jaundice?

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If your Landlord uses one of the online letting agents (like www.lets-rent.co.uk or UPAD etc.) then there is generally no fees anyway apart from a one off referencing fee. I always try to bypass the high street agents as a general rule anyway :)

The on-line ones all use 6 monthly contracts that turn periodic after 6 months which means that you can only have your rent changed once a year anyway. This gets rid of any renewal fees from the agents as well.

I sometimes think I would like a longer tenancy agreement but if I was locked in for say 3 years - I worry that my LL would just do nothing eg not fix any problems.

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I don't doubt that, like so many politically driven schemes and ideas dreamed up in haste, that the typically more astute and canny business minded landlords will pick holes and find loopholes in whatever initial proposals are put forward......

BUT I think the key point here, for the moment, is that at least the proposals are well intentioned and a de facto acknowledgement that cost of renting and lack of security in renting is becoming a major social issue. For that they deserve some credit.

Personally It has puzzled me that some attempt to offer greater security of tenure to renters has not been made beforehand. It is not beyond the wit of man to construct a framework of rules that could make the current landlord-renter scales more equally balanced.

For example, at present an AST gives the first 6 months as a minimum and thereafter typically 1 monthly thereafter with 2 months notice only from the landlord. Obviously not conducive to long term family planning, etc.

As a first step alternative how about something like this......

Renters given an initial 6 months as is presently the case. Subject to good behaviour and no damage incurred, etc then at the end of the 6 months, if the tenants want to stay, the landlord becomes legally obliged to offer the next lease of 30 months duration. BUT.....the tenant retains the right to leave earlier than this without penalty subject to some reasonable notice period to the landlord (say, 3 months?). Not unreasonable in return for the longer period of security the landlord is offering. If they leave in less than the notice period there could be some sliding scale of penalty owed to the landlord, i.e the shorter the notice the bigger the penalty.

Similarly, in return for the landlord getting peace of mind of uninterrupted flow of rental income for extended periods, the landlord will be obliged to keep the future rents limited to some pre-agreed formula - rather than at present where they can charge whatever they may feel like.

People may reply that there is nothing in law to stop a landlord agreeing to a long term multi-year rental contract at present, with all these various terms and clauses and conditions included. The point I make however is that such arrangements are, I believe, to be regarded as normal and not special. Requiring landlords to comply to such standards and expectations will have the effect of removing from the market a lot of greedy cowboy landlords whose financial planning is never further than the end of the month - and shift the balance back towards more responsible longer term outlook professional landlords?

Some good ideas here. I think a three year let might need to move more towards the German model where I believe you are responsible for white goods (even buying them), decoration etc. But obviously not during the first 6 months. Starting to sound too complicated for my liking!

Talking of fees, now I'd be happy to pay a few hundred pounds for the following knowing I was about to get a 3-5 year let

  1. credit check/criminal records etc on landlord
  2. a survey of some sort (focusing on potential maintenance costs to be born by the tenant, quality of life, energy bills etc)
  3. a mutually agreed, legally binding rent rise clause - I'll decide this, not the government thank you.
  4. erm, that's it?

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I general tenants don't want longer contracts (even if some stay for years) in exchange for a longer notice period. I always offer 12 months rather than 6 (with 1 month notice after the 6 months are up) and have only once had someone take me up on it. YMMV of course.

Even in countries where 3 year contracts are normal (like the European renting paradise people on HPC talk about) there are usually get out clauses which means you can evict tenants sooner if you wish.

What you are saying is backed up by the Generation Rent polling data recently published. Something like 80% of renters questioned said they were happy with the length of their current contract.

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Just say on the BBc...something along the lines of labour will cap rent increase.

Well there's a thing...all I heard was labour will allow rents to rise.

how about:

FORCE DOWN RENTS YOU BUNCH OF IDIOTS EVERYONE IS SKINT.

Another great reason to vote UKIP.

I'm surprised Ed Miliband didn't competed in the Olympics given how much he likes meddles.

I'm here all week. Don't forget to blah-de-blah.

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Bless the Labour party - the answer to almost every question is yet more regulation. Sadly they fail to realise that history judges these regulations by their fruit and entirely forgets the original intention. Thus they make themselves determined but unwitting hostages to the law of unintended consequences. If life is kind then the policy may get forgotten before they actually reach power.

The unintended consequence here could, I suspect, involve pushing BTL landlords into bankruptcy and their tenants onto the street in vast numbers. This would require a certain blend of inflation, deflation and rent caps. Of course these circumstances could never occur - well not for the next 18 months anyway according to all respectable commentators.

Think I am having a yellow day or is it just jaundice?

Yet the current government is up to its armpits in regulation, Largely expensive market intervention to push up prices. Defaulting on mortgage?.........we pay the interest for you. Millions of people defaulting on mortgages?....we buy the bank. Can't afford the rent?.....we pay it for you through LHA. Is this not regulation? The fact that it is done to stimulate inflation does not make it anything other than market regulation.

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It appears that they have not thought this all through before rushing to publicise the scheme.

They went on about the cost of living crisis but to continue they will have to discredit the cpi index as the gov will just shout inflation falling (prices rising less fast). Even on the deficits well George is still running massive deficit. It is reducing in the forecast but hey can always postpone the balanced budgets A couple of years. OOsbourne seems to have become Brown?

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Just say on the BBc...something along the lines of labour will cap rent increase.

Well there's a thing...all I heard was labour will allow rents to rise.

how about:

FORCE DOWN RENTS YOU BUNCH OF IDIOTS EVERYONE IS SKINT.

:lol:

"Buying is dead money" - I recall you posting the other week. :lol:

She gets on my nerves most of the time, but this is worth a read, but recalling that 2009 was quite a sliding year in rents anyway, so any 'growth' championed by the VI, should be compared against then. Rents should slip back to the 1970s imo.
publication date: Feb 3, 2014 Kate Faulkner's definitive guide to what's happening to national rental trends.
Kate Faulkner comments on Rental Report Headlines:
“Wow – how nice, for once we have all the rental indices pretty much agreeing with each other! The good news is, for tenants strapped for cash due to cost of living rises and little wage growth, their rents are pretty much static – even in London. This proves rents move in line with wage growth – even when demand is higher than supply.”

March 2014

Despite many a comment about ‘rents being at their highest’ or ‘crazy prices’ they aren’t. One thing we have learned from the credit crunch is even in areas where demand is higher than supply, unlike when buying, rents are still very much linked to wages. As wages have hardly moved since 2007, neither have rents.
So why are some rental indices recording increases? Basically, they don’t go back far enough. The Belvoir Index I run goes back to 2008 when rents were at their height. Other indices started in 2009 and 2010. The ‘rises’ they are
picking up, bar London, are, in the main, rents recovering to their 2008 heights.
So if you rented in 2008 and are now renting again, then you won’t see much difference. If though you rented at the low in 2009, for you there will ‘appear’ to be quite a big hike. From a long term landlords perspective though, they don’t see rent rises in line with inflation – which is a problem as it means landlord’s real incomes are falling annually.
Here are my rental summary headlines
Kate Faulkner comments on Rental Report Headlines:
“With latest figures showing inflation is running at around 2% but wage increases are still lower – at 1.4%, it’s still proving to be tough to increase rents. This is despite the recovery in the property sales market, which means many properties previously being rented are now being sold as we recover from the credit crunch. It doesn’t seem however much demand exceeds supply, private rents are restricted by wage growth.”

http://www.propertychecklists.co.uk/articles/property-rents-kate-faulkner

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She gets on my nerves most of the time, but this is worth a read, but recalling that 2009 was quite a sliding year in rents anyway, so any 'growth' championed by the VI, should be compared against then. Rents should slip back to the 1970s imo.
publication date: Feb 3, 2014 Kate Faulkner's definitive guide to what's happening to national rental trends.

http://www.propertychecklists.co.uk/articles/property-rents-kate-faulkner

Never heard of her. Can you give an impression of the advice - a shill or a mediator between buyers and sellers?

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Never heard of her. Can you give an impression of the advice - a shill or a mediator between buyers and sellers?

One hpcer's opinion: Totally dedicated, numerically illiterate, and supported by the usual selection of property widos they have on the telly.

Yet at other times, as here about rents, she seems to be that bit more realistic - she should be with her qualifications. [MBA, Business. Imperial College London. BSc (Econ) London School of Economics]

Other times, total HPIer, imo. Short iplayer clip of her in action in a BBC 'news' article, at the end of this post: http://www.housepricecrash.co.uk/forum/index.php?showtopic=198150&p=1102505852

27 September 2013
Do you think there's a danger of a bubble?

Kate Faulkner: I don't think there is; we've been talking about this for 5 or 6 months (laughing), and house prices and house price growth even at 5% is not back to its long term average which is inflation plus 2.8%. SO we've still got a long way to go and we've still got 6 years of an AWFUL.. HUGE FALLS in house prices that we've got to catch up on. So we've got another 5 plus years to go before house prices are back to where they should be.

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What Labour need to propose next is the removal of mortgage interest relief for landlords or to restore MIRAS for owner occupiers. It is unfair that landlordscan effectively outbid young families who want to own their own place, because they are able to write off the interest against tax.

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Kate Faulkner: I don't think there is; we've been talking about this for 5 or 6 months (laughing), and house prices and house price growth even at 5% is not back to its long term average which is inflation plus 2.8%. SO we've still got a long way to go and we've still got 6 years of an AWFUL..

So another numpty who cant be bothered to look at some historical context, then. LONG TERM HA! its inflation plus 2.8% because before 1975, wages were outpacing consumer price inflation, and since then house price rises have been supported by falling interest rates. Neither is continuing or will continue.

Does she really think house prices will continue to rise in excess of inflation for all eternity purely because they have done in her lifetime? She doesnt even bother reducing it relative to inflation. 2.8% higher than 15% inflation isnt a huge amount, relatively. 2.8% higher than 1.5% inflation is colossal.

Its truly disturbing, the amount of people in high places who simply take a superficial look at statistics and dont even bother looking for the causes behind them.

"It'll be like that because its been like that for the last couple of decades" isnt an argument, its an inane and obnoxious statement.

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In yesterday's Evening Standard there is a piece by a LL spokesman saying that tax breaks for LLs offering 3 year tenancies would be welcome.

'If Ed Miliband wants to find ways to ensure LLs behave decently, he should try to incentivise long-term rentals. Landlords pay an unenviable amount of tax on their rentals, with no opportunity to reclaim VAT. A tax break on three year rentals would be very well received.'

There - I knew you'd all enjoy that.

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In yesterday's Evening Standard there is a piece by a LL spokesman saying that tax breaks for LLs offering 3 year tenancies would be welcome.

'If Ed Miliband wants to find ways to ensure LLs behave decently, he should try to incentivise long-term rentals. Landlords pay an unenviable amount of tax on their rentals, with no opportunity to reclaim VAT. A tax break on three year rentals would be very well received.'

There - I knew you'd all enjoy that.

Labour ought to deal with the fact that lenders often do not allow tenancies of over 12 months.

The tax issue is a laugh but if you make a loss there isn't any to pay, and I expect many LLs make a loss, the carrot being prospective HPI. The ones who make enough to pay taxes ought to be interested in 3 year tenancies in the same way that supermarkets are interested in opening the front doors every day- it's the reason they exist. Unless I've missed something...

Edited by The Knimbies who say no

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