Guest TheBlueCat Posted September 2, 2015 Share Posted September 2, 2015 Why is it bad for governments to protect/enforce longer tenancy agreements? The current system is already broken. Renting should be seen as a secure alternative to buying. It currently isn't secure at all. The two are somewhat separate things. The AST system clearly should be replaced since all it does is create the conditions for churn which letting agents of course love. Controlling rents is a different issue. If it's about ensuring that landlords can only raise (or lower) rents in line with the market (i.e. to stop them effectively evicting someone by just doubling their rent) then that's fine, if it's about enforcing rents that are lower than the open market then all it will do is, over time, reduce the stock of rental property. Anyone, like me, old enough to remember the time before ASTs back when tenancies were rent controlled and protected can tell you that it was almost impossible to rent anywhere back then without going to a gangster landlord who'd get you out by whatever means necessary if they wanted the place back. Quote Link to comment Share on other sites More sharing options...
Guest TheBlueCat Posted September 2, 2015 Share Posted September 2, 2015 "Renting In Scotland Just Got Better" No it didn't. Better would be - take away the props Indeed. If this turns into rent controls that force rents below the market, then the title will be 'Renting In Scotland Just Became More or Less Impossible' Quote Link to comment Share on other sites More sharing options...
South Lorne Posted September 2, 2015 Share Posted September 2, 2015 Indeed. If this turns into rent controls that force rents below the market, then the title will be 'Renting In Scotland Just Became More or Less Impossible' ..the point is ..without the 'props'..prices would correct ...and people would be buying once again instead of renting.... Quote Link to comment Share on other sites More sharing options...
Guest TheBlueCat Posted September 2, 2015 Share Posted September 2, 2015 ..the point is ..without the 'props'..prices would correct ...and people would be buying once again instead of renting.... That too. Interest rates up, planning restrictions and population growth down, job done. Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted September 2, 2015 Share Posted September 2, 2015 That too. Interest rates up, planning restrictions and population growth down, job done. Except none of those would bring prices down. Prices weren't lower with higher rates or less immigration. Nor are they boosted by planning 'restrictions' that don't involve any obligation/not to actually increase the future build rate rather than just increase the land price. Quote Link to comment Share on other sites More sharing options...
Guest TheBlueCat Posted September 2, 2015 Share Posted September 2, 2015 Except none of those would bring prices down. Prices weren't lower with higher rates or less immigration. Nor are they boosted by planning 'restrictions' that don't involve any obligation/not to actually increase the future build rate rather than just increase the land price. If you say so. Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted September 3, 2015 Share Posted September 3, 2015 If you say so. I don't say so. History, data, theory and practice say so. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted September 3, 2015 Share Posted September 3, 2015 That too. Interest rates up, planning restrictions and population growth down, job done. Interest rates free to do what market wants is infinitely superior to more managed rates. Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted September 3, 2015 Share Posted September 3, 2015 Higher rates fom 10% to 12% crashed the market in late 80s and early 90s. Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted September 3, 2015 Share Posted September 3, 2015 Higher rates fom 10% to 12% crashed the market in late 80s and early 90s. Or rapidly rising prices leading up to 80s/90s crashed the market. The cycle's the other way round - falling land prices result in lower interest rates. The raise-rates argument is backwards because rates only rise when prices have been rising. Whether that might later correlate with lower house prices misses the point that higher prices came first. Does that mean there's a problem at ~0% BBR? Yep, because owners' kids and grandkids are tapped out so there's an array of nudges and measures layered on top of exisitng land price skew . Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted September 3, 2015 Share Posted September 3, 2015 (edited) ..apart from the fact housing is over priced not because of scarcity ..but because of the government injecting financial scaffolding to keep prices high.....less government interference is needed ..apart from the eradication of money laundering supporting the market especially in London.... As I'm getting increasingly bored of repeating - supply constraints are a necessary precondition for credit fuelled price increases. Its why for example you will never get a credit fuelled boom in the price of toyota corrollas no matter how much credit money is available to buy them. Of course a marginal increase in supply will not help much, you have to increase supply to the point where a surplus exists in order to take credit availability out of the picture. Edited September 3, 2015 by goldbug9999 Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted September 3, 2015 Share Posted September 3, 2015 As I'm getting increasingly bored of repeating - supply constraints are a necessary precondition for credit fuelled price increases. Its why for example you will never get a credit fuelled boom in the price of toyota corrollas no matter how much credit money is available to buy them. Of course a marginal increase in supply will not help much, you have to increase supply to the point where a surplus exists in order to take credit availability out of the picture. It's not that prices couldn't be lowered via increased supply, it's that they won't be while greater supply is only predicated on private housebuilding which would lower private income streams or profits. There's currently no incentive for that to happen, beyond the public interest; which isn't the price-setting interest. Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted September 3, 2015 Share Posted September 3, 2015 Stepping back a bit - it's strange how classical liberal ideas like a LVT have basically no mainstream or even fringe support, and we're entering into a battle between old-school leftist policies and neoliberal market support policies. A moderate interventionalist approach might be to tweak ASTs to give tenants just a little more security of tenure, while introducing some kind of LVT lite - by perhaps linking council tax to property prices, and perhaps even relaxing planning a little for self-builders or something. But no one in mainstream politics is suggesting anything like that. It's basically QE/ HtB / ZIRP / NIRP all the way towards a rent-seeking neofeudal dystopia. Then eventually someone comes along and offers to slap rent controls on the whole caboodle and take us back to traditional socialism. It's kind of fun to watch, but it's pretty depressing when you think about it. Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted September 4, 2015 Share Posted September 4, 2015 Systems that transfer other people's earned efforts and income to oneself are popular. It's not rocket science to work out why wealth and power brokers/aspirants prefer to privatise rents and socialise wages/profits - rather than socialising rents and privatising wages/profits. It's more interesting to wonder why both left and right mainstream opinion converged on the idea that taxing work and income trumps paying for public goods from land rents. And what that implies of the system-spectrum and public priorities and motivations. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted September 4, 2015 Share Posted September 4, 2015 Systems that transfer other people's earned efforts and income to oneself are popular. It's not rocket science to work out why wealth and power brokers/aspirants prefer to privatise rents and socialise wages/profits - rather than socialising rents and privatising wages/profits. It's more interesting to wonder why both left and right mainstream opinion converged on the idea that taxing work and income trumps paying for public goods from land rents. And what that implies of the system-spectrum and public priorities and motivations. Rent stats in Scotland are probably skewed wildly upward by Aberdeen? (now in the process of crashing) Rent in Glasgow and Edinburgh has gone nowhere in years, BTL`ers must be really struggling by now. Quote Link to comment Share on other sites More sharing options...
Ohmyword Posted September 4, 2015 Share Posted September 4, 2015 I don't know. Rents in Edinburgh are reportedly up 9% in the last year and that seems about right to me. I moved rental flat earlier this year and prices did seem to have risen. It was also pretty brutal in terms of competition for properties by prospective tenants. The letting agent of the flat I ended up moving to cynically held an open viewing meaning you had about 2 minutes to look round and then it was a race to phone the agency office to pay the deposit. I was still on the phone paying the deposit as the agent was ushering me and the disappointed viewers out, asking me to "take it outside" as I paid the £1000 deposit. As regards the Private Tenancies Bill, bear in mind it's just a proposal for a Bill. That Bill will work its way through the Scottish Parliament over the next 8 months or so. It will probably just bestow powers to introduce rent controls that will require separate regulations to be made setting out the detail. The upshot is it will be at least two years, probably three, before rent controls become a reality in Scotland. And of course we know nothing at this stage about how aggressive or otherwise the rent controls will be. Still, its interesting that its on the Government's radar as an issue. Note, however, that Nicola Sturgeon would not appear to be a true HPC believer. She has also pledged £195million over the next three years to extend the Help to Buy (Scotland) Scheme, thereby "helping" a further 6500 households. Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted September 7, 2015 Share Posted September 7, 2015 Rent controls not working in Sweden. People killing each other. http://www.bloomberg.com/news/articles/2015-09-07/one-chart-that-will-keep-sweden-s-central-bank-up-at-night http://www.theguardian.com/world/2015/aug/19/why-stockholm-housing-rules-rent-control-flat Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted September 7, 2015 Share Posted September 7, 2015 Rent controls not working in Sweden. People killing each other. http://www.bloomberg.com/news/articles/2015-09-07/one-chart-that-will-keep-sweden-s-central-bank-up-at-night http://www.theguardian.com/world/2015/aug/19/why-stockholm-housing-rules-rent-control-flat "In Sweden, 30% of interest expenditure is deductible from other taxable income ... decision to abolish property tax in 2008 ... replaced by a municipal property charge with a ceiling ... The ceilings were raised somewhat after 2008, but homeowners' costs were still significantly lower than previously." "Households' expenditures on mortgage loans is affected over the short term by whether or not the household amortises its mortgage. Choosing not to amortise a loan increases a household's scope for interest payments and thus the ability to take on a larger loan ... the amortisation periods for the first mortgages that were actually amortised were very long. For example, in 2012, the average amortisation period for the first mortgage stock was about 148 years according to the banks' reports to Finansinspektionen and about 130 years according to the random samples...but at the same time, households were taking out new loans faster than they were amortising." http://www.riksbank.se/Documents/Rapporter/Riksbanksstudie/2014/rap_riksbanksstudie_140411_eng.pdf Quote Link to comment Share on other sites More sharing options...
ccc Posted October 9, 2015 Share Posted October 9, 2015 http://www.bbc.co.uk/news/uk-scotland-scotland-politics-34477176 More details - certainly looks an improvement. Quote Link to comment Share on other sites More sharing options...
Neverwhere Posted November 19, 2015 Share Posted November 19, 2015 Last chance to take The Private Housing (Tenancies) (Scotland) Bill survey today, for any Scottish HPCers. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted November 19, 2015 Share Posted November 19, 2015 I don't know. Rents in Edinburgh are reportedly up 9% in the last year and that seems about right to me. I moved rental flat earlier this year and prices did seem to have risen. It was also pretty brutal in terms of competition for properties by prospective tenants. The letting agent of the flat I ended up moving to cynically held an open viewing meaning you had about 2 minutes to look round and then it was a race to phone the agency office to pay the deposit. I was still on the phone paying the deposit as the agent was ushering me and the disappointed viewers out, asking me to "take it outside" as I paid the £1000 deposit. As regards the Private Tenancies Bill, bear in mind it's just a proposal for a Bill. That Bill will work its way through the Scottish Parliament over the next 8 months or so. It will probably just bestow powers to introduce rent controls that will require separate regulations to be made setting out the detail. The upshot is it will be at least two years, probably three, before rent controls become a reality in Scotland. And of course we know nothing at this stage about how aggressive or otherwise the rent controls will be. Still, its interesting that its on the Government's radar as an issue. Note, however, that Nicola Sturgeon would not appear to be a true HPC believer. She has also pledged £195million over the next three years to extend the Help to Buy (Scotland) Scheme, thereby "helping" a further 6500 households. I can see two problems already. Deal with private landlords, that way you side step the Agent/EA commission circus and step into the real world. My last flat was a large one, decent sized kitchen, living room, OK bathroom, bedroom and boxroom, 400 p.m for most of the lease, rising to 450 p.m towards the end, and I had that flat for seven years. Present one is smaller, but only 400 p.m. I have rented in Edinburgh since the late 90`s and always laugh when I see the "rents soaring" articles. In fact Hamish posted a "rents soaring" thread over on MSE just before Aberdeen headed for the U-Bend. You couldn`t make it up Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted November 19, 2015 Share Posted November 19, 2015 In fact if Aberdeen tanks, as I think it is obviously doing, there will be a knock on for rents and house prices in Glasgow and Edinburgh, and it won`t be to the side of increasing them. Quote Link to comment Share on other sites More sharing options...
Ohmyword Posted November 19, 2015 Share Posted November 19, 2015 Rettie & Co do some interesting reports and bulletins on the publications and research section of their website. See www.rettie.co.uk. Their last lettings bulletin dates from July 2015 shows Aberdeen rents down 4% compared to Scottish rents as a whole up 5.4%. Edinburgh up 8.8% for 2 bed flats (which is what I am renting). Whilst they obviously have an agenda, I'm not quite so cynical as to believe that their figures are falsified. Interestingly their May 2015 bulletin quotes a survey of 500 private landlords by Citylets which found that a third of landlords said that they would leave the sector or reduce their portfolios if the no fault ground of repossession was removed, as I understand is proposed by the Bill. 39% said that they would leave the sector if that measure and rent controls were introduced. When you add that to the reductions in tax relief for BTL it is conceivable that there really could be a large scale exodus by landlords, with all that that entails for prices. The July 2015 report also has some interesting comments on the apparent proposal to prohibit "student" tenancies lasting only the academic year. That threatens to stop the lucrative practice of Edinburgh landlords renting out their flats to students during the academic year and then coining it in in August by letting to the Festival market at sky high holiday rental rates. Further reason for landlords to sell up? Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted November 19, 2015 Share Posted November 19, 2015 (edited) Rettie & Co do some interesting reports and bulletins on the publications and research section of their website. See www.rettie.co.uk. Their last lettings bulletin dates from July 2015 shows Aberdeen rents down 4% compared to Scottish rents as a whole up 5.4%. Edinburgh up 8.8% for 2 bed flats (which is what I am renting). Whilst they obviously have an agenda, I'm not quite so cynical as to believe that their figures are falsified. Interestingly their May 2015 bulletin quotes a survey of 500 private landlords by Citylets which found that a third of landlords said that they would leave the sector or reduce their portfolios if the no fault ground of repossession was removed, as I understand is proposed by the Bill. 39% said that they would leave the sector if that measure and rent controls were introduced. When you add that to the reductions in tax relief for BTL it is conceivable that there really could be a large scale exodus by landlords, with all that that entails for prices. The July 2015 report also has some interesting comments on the apparent proposal to prohibit "student" tenancies lasting only the academic year. That threatens to stop the lucrative practice of Edinburgh landlords renting out their flats to students during the academic year and then coining it in in August by letting to the Festival market at sky high holiday rental rates. Further reason for landlords to sell up? Possibly, some might do that, many more will soldier on. Not sure the festival lets thing is the raging money maker it was a few years ago though, and the latest spate of madness in Paris will further reduce the numbers who will just hop on a plane to come here and stand around in large groups? As I said I have never had any trouble finding cheap rental in Edinburgh, the reality seems different to the impression of how in demand the city is that Retties etc. like to portray. The "exodus of landlords" is just scaremongering, a more truthful plea would be "exodus of our commission!" Edited November 19, 2015 by dances with sheeple Quote Link to comment Share on other sites More sharing options...
giesahoose Posted November 20, 2015 Share Posted November 20, 2015 Best thing they did was ban up front fees for tenants Quote Link to comment Share on other sites More sharing options...
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