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Dangerous Rented Properties Should The Local Council Get Power To Confiscate?

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There's just been a news bit on the BBC highlighting people living in dangerous properties. The guy who owned the properties was alleged to have multiple properties and be a "millionaire". If you are a landlord letting out substandard properties should the council have the power to confiscate the property and turn it into social housing, ensuring the BTL landlord letting out substandard properties get nothing.

Not that the powers that would consider this as too many elites are nice slumlords and there wonderful properties shouldn't be confiscated.

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As I posted on another thread, a relative is a few doors away from a 3 bed semi housing 14 people, including at least one primary school-aged child. 6 years of attempts to get much done about it have not resulted in much tangible action (the Gazebo with the TV in the garden was removed). Seems right that jail and/or confiscation should apply really, it's just openly tolerated squalor.

If slummy gets banned from being a LL he will simply have to cash out a muckle HPI gain (London). Totally galling prospect tbh, should be bigger sanctions than a fat cheque.

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Just require registration of all residential landlords. Those that aren't fit persons (convicted rapist's etc.) aren't allowed to be landlords in the first place, and councils get to bounce people off the list if they demonstrate themselves to be unfit to be landlords (with proper rights of appeal to stop some jobsworth from the council on a power trip from going overboard). You also get to give the list to HMRC so they can make enquiries about tax affairs.

It's so simple and solves so many problems that the only reason it hasn't been done has to be that the political establishment don't want those problems solved.

Edited by SpectrumFX

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Just require registration of all residential landlords. Those that aren't fit persons (convicted rapist's etc.) aren't allowed to be landlords in the first place, and councils get to bounce people off the list if they demonstrate themselves to be unfit to be landlords (with proper rights of appeal to stop some jobsworth from the council on a power trip from going overboard). You also get to give the list to HMRC so they can make enquiries about tax affairs.

It's so simple and solves so many problems that the only reason it hasn't been done has to be that the political establishment don't want those problems solved.

Registration and fit and proper person is required in Scotland and Wales.

Who will sort it out in England? I don't see Labour (who created this whole BTL mess), the Tories (who have MPs who filibuster pro-tenant legislation) or UKIP (whose housing spokesman is a LL who pockets £750,000 a year in HB) doing anything about it.

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There's just been a news bit on the BBC highlighting people living in dangerous properties. The guy who owned the properties was alleged to have multiple properties and be a "millionaire". If you are a landlord letting out substandard properties should the council have the power to confiscate the property and turn it into social housing, ensuring the BTL landlord letting out substandard properties get nothing.

Sounds like a great idea to me. :) The fear of losing a house to the council should serve as a strong deterrent.

My local authority (Norwich City) is enforcing landlord registration in the near future. I think other local authorities are doing the same thing. Given that private tenants now are a majority over social housing tenants it appears that local authorities are taking the issue affecting them a lot more seriously!

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They really need to bring in a mandatory licensing scheme for all PRS properties and violations of license conditions should result in fines that the council could keep. This would not only weed out slum landlords but it would give money back to cash strapped councils, meaning they would have more incentives to prosecute because they would benefit financially and allow really bad cases to have their homes confiscated as a "proceed from crime".

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Just to add some balance to the debate. I am a landlord and have done my best to ensure that my tenants are safe.

Boilers and gas appliances are serviced and checked in line with the legislation. Legionella assessments are completed with action taken such as the cleaning of cold water tanks etc. Smoke detectors and CO alarms are fitted, checked and updated if necessary. I regularly inspect electrical fittings and carry out periodic inspection reports and PAT testing.

Unfortunately, its very common to see batteries taken out of alarms, sockets overloaded and levels of cleanliness that are grim to say the least.

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^ Big deal. What do you think tenants pay you a fat wad of rental income for?

It's not about balance. We know there are some okay (in compliance) landlords. And then there are all the others.

I have a degree in Economics and then went on to teach it for 15 years before the recession. I left teaching to look after my children and witnessed the introduction of economic policies by governments that my past A-level students would have failed if they incorporated into their examination responses.

It's a fantastic subject to teach because it's so current. I do miss it!


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^ Big deal. What do you think tenants pay you a fat wad of rental income for?

It's not about balance. We know there are some okay (in compliance) landlords. And then there are all the others.

I think his point was that sometimes the dangers are brought by the tenant.

I let my home for a bit, and when I inspected it I would find stuff like:

smoke detectors with batteries removed, and mains supply fuse removed

Light bulbs blown and not replaced no lighting in some rooms or stairwells

Extractor fans disabled causing mould growth.

Furniture moved, so as to cover and obstruct electric heaters causing the heaters to trip out and need replacement of the overheat fuse

The worst I had was flesh eating beetle infestation caused by tenants hoarding unhygienic "bush meat".

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Those are some risks you take as a landlord. (I seem to recall the bush meat story).

If you're willing to rent your own home out £££/£, or an investment property out, those are some of the risks, if you choose tenants who don't have a caring attitude to the property.

You wouldn't, up until recently anyway - get any problems with any of my family as tenants - other than a bit less than home-owner level care about the property (it's a rental). (After shaving I still allow the water to drain from bathroom sink very slowly, and then wipe up the shavings with tissue, and put it in bin, to limit risk of future clogging drain blockages).

I hope this isn't turning on tenants as the problem.

BTL is demand driven. There has to be a demand for rented accommodation for people to consider investing in BTL.

Lots of demand comes from marriages / partnerships breaking up and being unable to afford to buy two properties sufficient in size to support the care of children. Housing benefits offer generous support to those on low incomes and without savings. There has been a significant cultural shift in attitudes towards making relationships work - whether this is good / bad is impossible to comment on but nevertheless it is a big factor influencing demand in the private sector.

It's really unfortunate that prices for lower priced family homes are skewed by this but is it really the private landlord who should "rot in hell"? Should the government stop providing support? Should the government provide more social housing? Should there be more impetus on making relationships work?

:rolleyes:

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I have been involved in a number of proceeds of crime investigations with errant landlords prosecuted under the Housing Act 2004, unfortunately in the case of Sumal http://cases.iclr.co.uk/Subscr/search.aspx?path=WLR%20Dailies/WLRD%202011/wlrd2012-247the Appeal Court ruled that rent which had been taken by the landlord through a proper tenancy agreement was not to be used in the calculation of any benefit in a poca confiscation, even if for example they were not licensed or were operating an illegal HMO.

This ruling severely limited our ability to use poca to remove the benefit from landlords who were engaging in slumlord type activities although we were successful in using poca to determine that a landlord, by not doing something for example fitting a fire alarm or fire doors would still have acquired criminal property and benefited from it. In these case the landlords were subject to a confiscation order, albeit reduced.

We can also use planning laws (the Sumal case doesn't apply in these instances) to confiscate rental income for the period after a prohibition order has been served in respect of the activities of landlords which would require planning permission for example sheds in beds and HMOs.

A far better solution would be to ability to include the benefit from rental income as well as other criminal benefit and have the confiscation monies set aside for social housing and further errant landlord enforcement activities. This would require a change in the law to overrule the Sumal case.

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Just to add some balance to the debate. I am a landlord and have done my best to ensure that my tenants are safe.

Boilers and gas appliances are serviced and checked in line with the legislation. Legionella assessments are completed with action taken such as the cleaning of cold water tanks etc. Smoke detectors and CO alarms are fitted, checked and updated if necessary. I regularly inspect electrical fittings and carry out periodic inspection reports and PAT testing.

Unfortunately, its very common to see batteries taken out of alarms, sockets overloaded and levels of cleanliness that are grim to say the least.

Well I suggest you maintain a void until tenants worthy of your landlord stewardship come along.

Don't let the door of the repo courts hit your **** on the way out.

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I think his point was that sometimes the dangers are brought by the tenant.

I let my home for a bit, and when I inspected it I would find stuff like:

smoke detectors with batteries removed, and mains supply fuse removed

Light bulbs blown and not replaced no lighting in some rooms or stairwells

Extractor fans disabled causing mould growth.

Furniture moved, so as to cover and obstruct electric heaters causing the heaters to trip out and need replacement of the overheat fuse

The worst I had was flesh eating beetle infestation caused by tenants hoarding unhygienic "bush meat".

And you Mr Rex.

If your business cannot handle these issues, you shouldn't be in this business. The phrase "I let my home" says it all. If you apply personal value to something in this case, enough to call it your home, you shouldn't give it to strangers.

Can you you imagine someone saying I rented out my wife once and she came back pregnant and riddled with STDs so I was less than pleased?

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You had a bit of a free ride career as an Economics-teacher imo, TWH.

Let's hope you get some HPC on your BTLs.

OK, you appear to be arguing the point that introducing a tax on the supply of a good or service (in this case rental accomodation) will actually reduce it's price.

I think that we agree that the tax may have the effect of landlords selling their property and therefore there are less properties available for rent. A shortage of supply of rental properties will surely mean that rental prices will be higher (ceteris paribus).

Of course some of these properties will be purchased by those who were previously renting but as there is presently a waiting list of 5 million for social housing, I think it's reasonable to assume that rents may be higher.

Rent controls were abolished in the UK in the 80's for similar reasons as the supply of private rental accomodation dried up.

PS if you are going to make a point, it might be better to do so in a less obnoxious way.

The BTL "mortgage" will be 20-30 years. That's a long time. Governments change. Attitudes change.

LOL. LVT would push rents down. The LVT is due whether it's rented out ot not... if the LL hasn't got rent coming in, how would he pay the LVT.... he would have to pay it out of their own pocket... they wont be wanting to do that for long. If the landlord "leaves the market" then the house doesn't disappear... if the landlord isn't renting it out, LVT means they will have an incentive to sell it.

attachicon.giffacepalm.jpg

I've just re-read your reply and I know think that your response is probably due to your lack of understanding of basic economic terminology - in this context to "leave the market" would be to sell the property.

Sorry perhaps I should have explained a bit more.

I don't think that it can be disputed that the rise in house prices led to a "wealth effect" that not only led to greater consumer confidence but also allowed consumers the ability to spend more on the back of re-mortgaging via easy credit. Consumer demand accounts for apporximately 70% of total demand in the UK economy. Over the last 3 decades the UK did become a nation of home owners encouraged through goverNment policies and financial deregulation. A large proportion of the population were much wealthier (on paper) than they could ever have anticipated.

I understand your reference to the tulip bulb bubble but think that housing is much more important to everyone and therefore a rise in value so much more significant across the population as a whole. How many people had there fingers burnt via a crash in the tulip bubble?

I don't think high house prices benefit growth on the supply side as they restrict geographical mobility and reduce incomes in real terms. There is no way that anyone should advocate high prices as a growth policy but it is undeniable that they were a part of the last boom.

High houses prices should not now stimulate growth but I think that a dramatic fall in nominal terms would knock consumer confidence and that's why the government would not want to impose policies to do so, Therefore I believe a slow deflation through a decrease in real terms would be the more desirabel outcome for them.

Sorry but there are separate markets.

If landlords leave the rental market the supply of rental properties falls (especially relevant given the cut in funding to local authorities and housing associations) and if demand stays the same, the price goes up. Population predictions indicate that demand is increasing. The main factor that might influence demand here are benefits.

If landlords leave the rental market and sell their properties then the market price for buying a property may fall as a result of the increase in supply.

Of course the two markets are related but I believe that the rental sector now has a significant number of people who are either not interested in buying or will not be able to buy their won home.

Finally, the land market is also very different - have a look at how much land is being banked by the major developers.

Last point - we shouldn't ignore the fact that high house price actually encourage more house building which leads to more employment (direct and indirectly) and also generates an improvement in local facilities. The construction industry is a major employer.

I just don't agree with your points, I cannot think of any examples where the introduction of a tax that increases the costs of providing something will increase its supply. Perhaps you are concentrating on the short - run? In this example its almost the same as saying that if mortgage rates for BTL products increased by 2.5% then rents will fall.

We won't ever agree on this as your view of renting as a tax is nonsensical.

Edited by Venger

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Just to add some balance to the debate. I am a landlord and have done my best to ensure that my tenants are safe.

Boilers and gas appliances are serviced and checked in line with the legislation. Legionella assessments are completed with action taken such as the cleaning of cold water tanks etc. Smoke detectors and CO alarms are fitted, checked and updated if necessary. I regularly inspect electrical fittings and carry out periodic inspection reports and PAT testing.

Unfortunately, its very common to see batteries taken out of alarms, sockets overloaded and levels of cleanliness that are grim to say the least.

I'm talking about slumlords not people who ensure they have the paperwork and look after the property. I'm talking about the people who won't fix the leaking roof etc... Landlords who maintain the property to a liveable standard shouldn't have anything to fear.

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Whatever you say Mr.Economics In-It-For-The-Long-Term.

Rental demand families going through separation, single parents etc, people not able to get a mortgage (BTLer-fest-outbidding price out imo)

You're lucky it's only me who has questioned your position.

CVxhNGIXAAALKWF.jpg

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And 25-year tipped in nicely too (thanks).

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I can't be arsed

I'll keep a record of your original post for HPC purposes.

Oh dear, some very negative responses and clearly once again no room for any reasonable debate from a couple of members!

There seems to be a totally blinkered view that tenants are the victims of greedy landlords and if it weren't for them then everyone would have the ability to buy and live happily ever after.

Undoubtedly the system is broken. There is a chronic lack of supply of housing. Government policy has been irresponsible in allowing the BTL market to grow as some for of replacement for social housing. The right to buy has not increased the housing stock of homes available to rent. The extension of right to buy to housing associations will completely mess with their finances and is morally questionable.

The demand side has grown through population increase and demographic change but also through interference in the market by government policies.

In addition I would add that the demand for a lot of rental properties in my experience is driven by people who would not have the ability to obtain a mortgage such as families going through separation, single parents, the self-employed that do not declare all of their earnings and people with poor credit ratings.

FWIW I have re-developed houses and completed a new build to let. I am not over-leveraged (presently 20% and projected to be zero by 2017). I think the housing market is teetering on the brink of falls but I will not simply sell up as I'm in it for the long-term and could not bring myself to evict someone or a family on this basis. I haven't had a change in tenancy for over 2 years and keep my rents much lower than current market rates. And yes I do declare my income!

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I'm talking about slumlords not people who ensure they have the paperwork and look after the property. I'm talking about the people who won't fix the leaking roof etc... Landlords who maintain the property to a liveable standard shouldn't have anything to fear.

I understand that but perhaps there should also be consideration where tenants do not consider the safety of themselves, their home or their neighbours.

On a practical note, a system of confiscation would be unenforceable / impractical but I would agree with licensing if it were meaningful.

Underlying this is the problem that local authorities are unable to cope with housing demand and as long as someone is being housed, then they have less responsibility and will not want to enforce regulations that might add to their waiting lists.

Edited by The White Horse

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Whatever you say Mr.Economics In-It-For-The-Long-Term.

Rental demand families going through separation, single parents etc, people not able to get a mortgage (BTLer-fest-outbidding price out imo)

You're lucky it's only me who has questioned your position.

CVxhNGIXAAALKWF.jpg

Surely I don't have any friends?

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Whatever you say Mr.Economics In-It-For-The-Long-Term.

Rental demand families going through separation, single parents etc, people not able to get a mortgage (BTLer-fest-outbidding price out imo)

You're lucky it's only me who has questioned your position.

CVxhNGIXAAALKWF.jpg

Quick look at government statistics shows just over 40% of private renters have a combined household income of less than £20,000 pa. 65% have a combined income of less than £30,000 pa.

There are 405,000 households in social renting that have a combined household income of greater than £30,000 pa.

Only 1/3 of properties rented in the private sector are by married / cohabiting couples.

https://www.gov.uk/government/statistical-data-sets/social-and-private-renters

Edited by The White Horse

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I understand that but perhaps there should also be consideration where tenants do not consider the safety of themselves, their home or their neighbours.

On a practical note, a system of confiscation would be unenforceable / impractical but I would agree with licensing if it were meaningful.

Underlying this is the problem that local authorities are unable to cope with housing demand and as long as someone is being housed, then they have less responsibility and will not want to enforce regulations that might add to their waiting lists.

How nice of you to agree to licensing under your own reservations - and "on a practical note, confiscation would be unenforceable/impractical". Not necessarily so. Raise a penalty against the landlord and allow council to take ownership. Skim all the equity. Licensing on a bit of a roll out already. With a chunky fee to pay.

Cameron announces nationwide landlord licensing scheme

22-05-2015

Thanks to Giles Peaker for drawing my attention to this paragraph in David Cameron's speech on immigration yesterday:

"There are other ways we can identify those who shouldn’t be here, for example through housing. For the first time we’ve had landlords checking whether their tenants are here legally. The Liberal Democrats only wanted us to run a pilot on that one. But now we’ve got a majority, we will roll it out nationwide, and we’ll change the rules so landlords can evict illegal immigrants more quickly.

We’ll also crack down on the unscrupulous landlords who cram houses full of illegal migrants, by introducing a new mandatory licensing regime. And, a bit like ending jobs when visas expire, we’ll consult on cancelling tenancies automatically at the same point. It’s not just through housing and jobs; we can track down illegal migrants through the banking system too".

http://www.propertytribes.com/cameron-announces-nationwide-landlord-licencing-scheme-t-14504.html

Of course you have friends; other BTLers most likely. What's brought you out of your HPC deep-sleepering anyway? Another candidate who fancies himself as the 'voice of reason' for BTL ?

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I wasn't making that analogy. I don't make that analogy because I wouldn't compare the suffering caused by slavery to the problems caused by landownership.

However, the analogy is valid in kind, if not in degree. You cannot live in the UK without paying a fee to a landowner. You must work for them, or be them. Although you can choose which landowner, you can't choose none.

Incredulity isn't an argument. As in 'The earth moves? Riiiiight....', or 'Heavier than air flying machines? Riiiiight...'

Anyway, the analogy I was making was between the historical belief that slavery was a perfectly legitimate trade,

and the current belief that being a landlord is a perfectly legitimate trade. Just as landlords are now, slave owners were once convinced of their morality,

They were incredulous, they had 'rights' and specious economic arguments, they looked after their slaves and did good work.

Landlords don't provide a place to live. They take away living space, and then force you to rent it back.

Landlords don't provide a place to live. They take away living space, and then force you to rent it back.

Oh please....

No counter argument then?

Nice counter argument ******nut, got anything better?

Yes - however I'm not sure what you mean by *****nut? Nevermind.

I have bought 2 derelict houses this year and despite the problems I have encountered with planning and building controls, I have managed to get one property now rented out and the other is in the process of being near being occupiable in 2 months or so.

It is not financially viable to sell either property and I am comfortable with the fact that I am providing a decent home for people to live in. I resent the continuous throwaway comments from people that really don't have any practical knowledge or understanidng.

Practical knowledge or understanding of what?

House-builders and developers provide houses, landlords do not provide land.

There is nothing wrong with the former, and everything wrong with the latter.

What fraction of the rent reflects the cost of renovation, and what fraction reflects the initial cost of the land?

I am both a developer and landlord. Without the ability to be a landlord, I would not be able to develop property due to the UK taxation system.

If you do not like the thought of renting then the alternative is to buy. Finance in the BTL market is much more expensive than for the first time buyer. Landlords have not engineered the housing shortage.

I don't operate as a limited company so therefore would be subject to 40 or 50% tax on any profits if I sold straight away, If I keep a property for more than 3 years then CGT is lower (with an additional allowance) and I am also able to offset this against any losses in other investments if applicable.

So as a very small developer, it works best for me to do it in this way. I work full-time renovating properties (very much hands on and learning every day) and maintaining the ones which I let out. I work hard. I charge rents that are generally lower than the market rate for tenants that wish to stay in the property for a relatively long period and as a result have low tenancy turnover.

I understand the theoretical arguments that are banded about regarding Ricardo and economic rent (I'm an economics graduate) but feel the need to state that in reality my experience of making a living in this market is not as simple as it is often portrayed.

Most developers will of course be incorporated and take advantage of any tax loopholes that they can find - my circumstances do not follow the typical example but suit my own individual needs.

In addition. it's not just the tax system that makes things difficult. On new builds, even if a property passes building control (which of course it should by law) you still need to get some from of new build warranty such as those provided by NHBC. Essentially this means that you need to be available to snag for 2 years and put a significant sum as a guarantee for these works. I've found that it's just simpler and cheaper for me to rent out a newly developed property and manage it myself.

The economics of land are what they are. The fact that your participation in the market has made you feel differently about them is not some kind of deep revelation.

Again, we return to the slavery analogy. The fact that tax laws make it more profitable, the fact that everyone is doing it,

the fact that most people accept it, doesn't make something right.

Landlords do not provide land, they take it away from people who need it. No amount of special pleading changes that.

Of course, the fact that you are also a developer muddies the water, because developers are doing a very valuable job providing houses, and a job that can't be done without also speculating in the land market.

This is not what I would call BTL, and places you firmly in the moral grey area we all have to live in.

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