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fru-gal

Labour 2016 London Mayoral Hopefuls Advocating Rent Controls Of Some Sort

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David Lammy, Diane Abbott and Sadiq Khan are all talking about rent controls for London if they become Mayor. Whether you agree with them or not, the fact that this becoming a political hot potato should warm the cockles of your hearts.

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Time is over for sensible measures. Rent controls are a nonsense that hurt everyone, but so is carpet bombing.

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Time is over for sensible measures. Rent controls are a nonsense that hurt everyone, but so is carpet bombing.

Why? I actually think a lot of the negative talk about rent controls have purposely been overblown in the media to indoctrinate everyone into thinking it is a bad idea. However, nobody really knows what rent controls would do since the last time they existed the housing market was very different. They also work fine in many places like Berlin. The ptb have convinced everyone that rent controls are bad because it is within their interests to paint them as bad for tenants whereas the right kind of rent controls would actually be very progressive and do the opposite of what they claim imo.

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Rent controls are a bad idea.... so bring them on, as market interference is tolerated if it enriches the rentier class at the expense of tenants.

Of course I suspect the type of rent controls they are advocating will be a lukewarm affair and a sop to tenant voters with more holes than a colander

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Rent controls are a bad idea.... so bring them on, as market interference is tolerated if it enriches the rentier class at the expense of tenants.

Of course I suspect the type of rent controls they are advocating will be a lukewarm affair and a sop to tenant voters with more holes than a colander

Diane Abbott is advocating pretty radical rent controls (proposed by Generation Rent). Not sure about the others.

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Why? I actually think a lot of the negative talk about rent controls have purposely been overblown in the media to indoctrinate everyone into thinking it is a bad idea. However, nobody really knows what rent controls would do since the last time they existed the housing market was very different. They also work fine in many places like Berlin. The ptb have convinced everyone that rent controls are bad because it is within their interests to paint them as bad for tenants whereas the right kind of rent controls would actually be very progressive and do the opposite of what they claim imo.

How do they work in Berlin?

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However, nobody really knows what rent controls would do since the last time they existed the housing market was very different.

I'd say that one thing they're pretty much guaranteed to do is make BTL much less appealing as an "investment". Even if the rest of the policy involves nailing me by the nadgers to an angry wolverine, I'd give it serious consideration on the basis of that alone.

Build more, yes, absolutely, but the rentier bias has to be dealt with first or they'll just snarf up all the new supply too. Delenda est BTL.

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I'd say that one thing they're pretty much guaranteed to do is make BTL much less appealing as an "investment". Even if the rest of the policy involves nailing me by the nadgers to an angry wolverine, I'd give it serious consideration on the basis of that alone.

Build more, yes, absolutely, but the rentier bias has to be dealt with first or they'll just snarf up all the new supply too. Delenda est BTL.

For them the policy is win-win (yes even for BTL owning politicians) on one hand it makes renters (aka voters) happy, but on the other it'll discourage new BTL entrants and hence control competition.

They might lose a few votes from would-be LL or recent BTL but that's nothing compared to the votes they'll gain. One BTL vote v 2/4/6.. tenant votes

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Don't forget this is specifically relating to London. London is very Labour and a large portion of it's populace are poor/working class and rely on benefits. Something like 25% of all Londoners are now in the PRS and another 25% are in social housing. There are a lot of owner occupiers but they won't care much about rent controls unless they are also BTLers. Tenants outnumber landlords and this is just going to increase. The spotlight on housing in London has increased markedly over the past year with big anti-eviction campaigns made more prominent by people like Russell Brand and Eddie Izzard. "Landlord" is becoming a dirty word and imo the politicians are starting to notice that big time. The housing crisis in London is being presented more and more as David vs Goliath.

Edited by fru-gal

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Don't forget this is specifically relating to London. London is very Labour and a large portion of it's populace are poor/working class and rely on benefits. Something like 25% of all Londoners are now in the PRS and another 25% are in social housing. There are a lot of owner occupiers but they won't care much about rent controls unless they are also BTLers. Tenants outnumber landlords and this is just going to increase. The spotlight on housing in London has increased markedly over the past year with big anti-eviction campaigns made more prominent by people like Russell Brand and Eddie Izzard. "Landlord" is becoming a dirty word and imo the politicians are starting to notice that big time. The housing crisis in London is being presented more and more as David vs Goliath.

Think they are trying to fix the 25% in social housing by getting rid of social housing. And private equity are behind it.

http://www.theguardian.com/society/2015/mar/20/guy-hands-linked-to-sweets-way-estate-evictions

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Think they are trying to fix the 25% in social housing by getting rid of social housing. And private equity are behind it.

http://www.theguardian.com/society/2015/mar/20/guy-hands-linked-to-sweets-way-estate-evictions

I was watching HUTH yesterday (only excuse is that I was also doing the ironing) and a one bed flat in Clydebank came up - perfectly OK and liveable, even had its own garden. Sold for £35K to two women who run a housing association. They said they had lost so many properties under right to buy legislation and were looking to replace them.

Rent for said flat, quoted by local EAs, was I think £450 pcm - I.e. a huge yield for any BTLer and assuming that that rent was based on HB rates, as it often is, then evidently HB rates in that area are far too high. What is the annual HB bill? Something like £23bn?

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I was watching HUTH yesterday (only excuse is that I was also doing the ironing) and a one bed flat in Clydebank came up - perfectly OK and liveable, even had its own garden. Sold for £35K to two women who run a housing association. They said they had lost so many properties under right to buy legislation and were looking to replace them.

Rent for said flat, quoted by local EAs, was I think £450 pcm - I.e. a huge yield for any BTLer and assuming that that rent was based on HB rates, as it often is, then evidently HB rates in that area are far too high. What is the annual HB bill? Something like £23bn?

Yes I saw that, was a very good buy for them.

I liked the parents pushing their daughter into people farming so she didn't waste a compensation claim!

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I don't think any mayor has the power to instigate a system of rent controls. It would need primary legislation first to enable her to do it, which would take ages even if whoever was in power in central government agreed. The mayor could therefore easily renege on the promise and blame someone else.

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I don't think any mayor has the power to instigate a system of rent controls. It would need primary legislation first to enable her to do it, which would take ages even if whoever was in power in central government agreed. The mayor could therefore easily renege on the promise and blame someone else.

Yes, the mayor of London isn't all that powerful. Most of the power sits with the borough councils. I'm sure they don't have the authority to regulate rents either though.

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I was watching HUTH yesterday (only excuse is that I was also doing the ironing) and a one bed flat in Clydebank came up - perfectly OK and liveable, even had its own garden. Sold for £35K to two women who run a housing association. They said they had lost so many properties under right to buy legislation and were looking to replace them.

Rent for said flat, quoted by local EAs, was I think £450 pcm - I.e. a huge yield for any BTLer and assuming that that rent was based on HB rates, as it often is, then evidently HB rates in that area are far too high. What is the annual HB bill? Something like £23bn?

LHA for a one-bed flat in West Dunbartonshire is £375 a month (multiplying weekly amount by 52 and dividing by 12).

The estate agents were exaggerating, I suspect. A quick search on Zoomovemarket reveals £425 as absolutely top whack for such a flat - they range from £350 to £425. Which explains the LHA, given that it's the 30th percentile of list of rents in the local broad rental market area.

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If the right wing press ridicule report an idea.. It's probably one which would benefit the 99%.

Exactly. It is exactly the same with the mansion tax proposals. Except that both the rich left and right come out to complain about "poor" people who have £2 million pound assets having to pay £3k more a year. Most ridicule and negative reporting of things like the mansion tax and rent controls is down to blatant self interest and wanting to defend the status quo imo.

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LHA for a one-bed flat in West Dunbartonshire is £375 a month (multiplying weekly amount by 52 and dividing by 12).

The estate agents were exaggerating, I suspect. A quick search on Zoomovemarket reveals £425 as absolutely top whack for such a flat - they range from £350 to £425. Which explains the LHA, given that it's the 30th percentile of list of rents in the local broad rental market area.

Even at £375, that is still a gloss yield of 12.8%. But then at only £35k I wouldn't be having any problem of buying a home!

Edited by renting til I die

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Yep the Mayor and councils in London and England have very little powers. It all resides in Westminster and we know what way they go. The UK is most centralised country in the developed world by a long way.

Rent controls and getting rid of buy to lets would suit many owner-occupiers too, as they've seen the big increase in landlords and transient tenants reduce many parts of London to near-enough slums. Even in formally half decent areas landlords have turned well looked after family homes into crumbling eye sores. It can be seen all over.

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For the life of me I don't understand why the Labour party hasn't championed itself as the "party of the tenant" (as opposed to the Tories' moniker of "party of the home-owner").

They could do several things to get renters to vote for them without even needing to alienate home-owners.

1. Increase security of tenure for renters. "Hard-working families can plan their lives and start a family without having to worry about being kicked out on a whim."

2. Regulate Landlords. "It's a business after all. Would weed out rogue landlords/slumlords."

3. As a consequence of these policies, BTL would become less lucrative to amateur investors and so prices would fall. You don't even have to target the sacred cow of house prices as this would lower them by the back door.

4. Only get-rick-quick landlords would baulk at these polices. Why would the average voter care that renters get a fairer deal?

5. Labour could capture many young voters and even some right-leaning young professionals that are trapped in expensive shared rentals in London.

Why are they not doing this?

Edited by Eddie_George

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I'd say that one thing they're pretty much guaranteed to do is make BTL much less appealing as an "investment". Even if the rest of the policy involves nailing me by the nadgers to an angry wolverine, I'd give it serious consideration on the basis of that alone.

Build more, yes, absolutely, but the rentier bias has to be dealt with first or they'll just snarf up all the new supply too. Delenda est BTL.

At first it will discourage buy to let but I think it depends what you mean by buy to let. It'll discourage the cowboy amateur landlords that's for sure but it might encourage the more professional ones who have larger portfolios and capital, especially if house prices decrease as a consequence of rent controls.

Thus our rental sector may slowly begin to look more like Germany, where renting is the norm.

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