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PeanutButter

Letting fees ban is good news for tenants – but beware a backlash

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https://www.theguardian.com/money/2019/jan/26/letting-fees-ban-tenants-renters-phil-spencer

From the man who not only seems to tolerate, but actively enjoy the company of The Honourable Kirstie Allsopp. 

 

But as the whole thing comes full circle, tenants should be wary of schadenfreude – as landlords are likely to respond to their additional costs by putting up rents.

 

🧐

 

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25 minutes ago, PeanutButter said:

landlords are likely to respond to their additional costs by putting up rents. 

🧐

I think we are now all bored of this obvious mistruth. Landlords are already charging as much as they possibly can and whatever happens to their costs is entirely irrelevant. 

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11 minutes ago, bushblairandbrown said:

I think we are now all bored of this obvious mistruth. Landlords are already charging as much as they possibly can and whatever happens to their costs is entirely irrelevant. 

When and how did anyone believe even for a few seconds that Spencer and Allslop knew about anything other than to get on TV and talk shyte?

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13 minutes ago, bushblairandbrown said:

I think we are now all bored of this obvious mistruth. Landlords are already charging as much as they possibly can and whatever happens to their costs is entirely irrelevant. 

This is essentially true, but landlords exiting the market will reduce supply which will underpin rents. Some tenants unable to buy into the softening property market will lose out, at least initially. Overall its a long term win though, undermining landlords & agents' positions.

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1 hour ago, hotblack42 said:

This is essentially true, but landlords exiting the market will reduce supply which will underpin rents. Some tenants unable to buy into the softening property market will lose out, at least initially. Overall its a long term win though, undermining landlords & agents' positions.

If a landlord exits the market either that house aquires a new landlord or a renter becomes an owner occupier. How do you see this negatively affecting renters in any way? If there is any impact of landlord costs going up, it is that house prices going down as landlords exit the market. There is no additional pressure on rents whatsoever. 

Edited by bushblairandbrown

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28 minutes ago, bushblairandbrown said:

If a landlord exits the market either that house aquires a new landlord or a renter becomes an owner occupier. How do you see this negatively affecting renters in any way? If there is any impact of landlord costs going up, it is that house prices going down as landlords exit the market. There is no additional pressure on rents whatsoever. 

Less supply of housing available to rent , this seems likely. Whether we will see a balancing fall in demand for rented accommodation as some renters leave rented market and buy is not guaranteed.  There are other dynamics at work on demand for rented accommodation particularly on a local level. The variable which will make all the difference is immigration.  If EEs return home we are going to see considerable falls in rent levels .

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3 hours ago, hotblack42 said:

This is essentially true, but landlords exiting the market will reduce supply which will underpin rents. Some tenants unable to buy into the softening property market will lose out, at least initially. Overall its a long term win though, undermining landlords & agents' positions.

It will not reduce supply/demand though. The number of tenants looking to rent will reduce by the same number as they buy those houses that the landlords have dumped on the market as house prices fall generally. Therefore no underpinning of rents

Edited by bear.getting.old

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20 minutes ago, bear.getting.old said:

It will not reduce supply/demand though. The number of tenants looking to rent will reduce by the same number as they buy those houses that the landlords have dumped on the market as house prices fall generally. Therefore no underpinning of rents

Some tenants will do this. Others won't for a variety of reasons - renting suits their current circumstances, outbid by BOMAD backed youngsters currently living with parents, outbid by wealthy boomers comfortable with the 3% SDLT surcharge, etc.

Its a complex socio-economic situation which will be very interesting for us to watch unfold.  It will take long enough for other events such as an Italian banking crises or Trump impeachment to occur in parallel & really spice things up 🙂

 

Edited by hotblack42
Spelling

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8 hours ago, bear.getting.old said:

Trump won't be impeached its wishful democrat thinking. There is more chance of the UK actually leaving the EU in full by April, no deal.

agreed

 

he may face some sort of charges down the line but it wont be while he is in office

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I would have thought this ban will make rents fall, if the landlord tries to bang up the rents then the tennant will have the freedom to just move somewhere else which at the moment they can’t because of the huge cost of fees. On a macro scale we will see more transfers and the landlords offering low value will be forced to adjust down or have a string of voids and go bust. Sort of like letting capitalism do its job for once!

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DEBTjunkie scumbags all trying to exit the market at once = price of two bed hovels crashing back to the prices FTBs are happy to pay.

 

which since the DEBTjunkie scumbags are the only clowns who have been bidding this garbage up against each other fuelled by interest only tax deductible DEBT for the past fifteen plus years, could be a LONG way down from current DEBTjunkie-only prices

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12 minutes ago, thewig said:

DEBTjunkie scumbags all trying to exit the market at once = price of two bed hovels crashing back to the prices FTBs are happy to pay.

 

which since the DEBTjunkie scumbags are the only clowns who have been bidding this garbage up against each other fuelled by interest only tax deductible DEBT for the past fifteen plus years, could be a LONG way down from current DEBTjunkie-only prices

I do suspect prices have a very long way to fall.... Heck I look around where I live, where prices are at 2004 levels and I wonder how many people can afford to buy them...

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4 hours ago, LetsBuild said:

if the landlord tries to bang up the rents then the tennant will have the freedom to just move somewhere else which at the moment they can’t because of the huge cost of fees.

THIS

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Agents and landlords are fijcked

4 hours ago, LetsBuild said:

I would have thought this ban will make rents fall, if the landlord tries to bang up the rents then the tennant will have the freedom to just move somewhere else which at the moment they can’t because of the huge cost of fees. On a macro scale we will see more transfers and the landlords offering low value will be forced to adjust down or have a string of voids and go bust. Sort of like letting capitalism do its job for once!

I agree.

There is also a secondary but more immediate impact: in expectation of the fees ban, the tenants (such as myself) who are aware of the ban will stay put until it comes into force.  While we may still suffer with paying renewal fees, the fees at commencement of the tenancies are far higher. 

Therefore there is less moving of renters and therefore there is an immediate hit on the estate agencies' fees.  However, there is also some immediate benefit for landlords from tenants no moving sooner than they would have otherwise.

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Coincidentally I met a woman yesterday who works at a letting agents. I asked her what the letting fees ban was going to do and she just looked gormlessly at me, paused for a couple of seconds presumably whilst the cog inside her tiny mind turned over and said “the landlords will have to pay it”

 

 

edit: needless to say I curled one out in her handbag on the way out 

Edited by thewig

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20 hours ago, hotblack42 said:

This is essentially true, but landlords exiting the market will reduce supply which will underpin rents. Some tenants unable to buy into the softening property market will lose out, at least initially. Overall its a long term win though, undermining landlords & agents' positions.

No.

Renting is much more elastic.

You might see people go to shared houses or stay with their parents for a bit.

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21 hours ago, PeanutButter said:

https://www.theguardian.com/money/2019/jan/26/letting-fees-ban-tenants-renters-phil-spencer

From the man who not only seems to tolerate, but actively enjoy the company of The Honourable Kirstie Allsopp. 

 

But as the whole thing comes full circle, tenants should be wary of schadenfreude – as landlords are likely to respond to their additional costs by putting up rents.

 

🧐

 

Does anyone else fund it strange tge guardian is letting phil spensor write pro LL pieces as thinly disguised news?

Or all islington lefties like that blair scum?

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16 hours ago, hotblack42 said:

Some tenants will do this. Others won't for a variety of reasons - renting suits their current circumstances, outbid by BOMAD backed youngsters currently living with parents, outbid by wealthy boomers comfortable with the 3% SDLT surcharge, etc.

Its a complex socio-economic situation which will be very interesting for us to watch unfold.  It will take long enough for other events such as an Italian banking crises or Trump impeachment to occur in parallel & really spice things up 🙂

 

I was renting during last housing crash.

Tgen - and there was 100x less rentals - voids were killing LL and a lot of accidental LLs inc my then LL who moved in with GF and was in so much neg eqity that he could not afford to sell.

Then rents were falling in £200 chunks as thats what people would move for.

In the end i moved into an old work mates house at a pepper corn rent as he went to US for a year - the company paid his mortgage and he wanted someone in the house to keep an eye on it.

That last point is not really understood but you invalidate your insurance if a house is unoccupied for 2+ months.

So  rents can fall below 0 if you need to pay someone to live in the house.

 

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7 minutes ago, spyguy said:

No.

Renting is much more elastic.

You might see people go to shared houses or stay with their parents for a bit.

This. Housing demand is very elastic. People will stay with family instead of moving to shared houses, stay in shared houses instead of moving to their own flat, stay in a flat instead of a house, move to an area with cheaper housing to get more space, delay/cancel starting a family etc. This elasticity is a major reason why London hasn't turned into Mad Max despite the 6-fold increase in housing costs since the late-90s: people have changed their lifestyles significantly in order to cope.

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1 hour ago, thewig said:

Coincidentally I met a woman yesterday who works at a letting agents. I asked her what the letting fees ban was going to do and she just looked gormlessly at me, paused for a couple of seconds presumably whilst the cog inside her tiny mind turned over and said “the landlords will have to pay it”

I expect a Mexican standoff between landlords and agents while both are getting closer to bankruptcy

 

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1 hour ago, thewig said:

Coincidentally I met a woman yesterday who works at a letting agents. I asked her what the letting fees ban was going to do and she just looked gormlessly at me, paused for a couple of seconds presumably whilst the cog inside her tiny mind turned over and said “the landlords will have to pay it”

 

 

edit: needless to say I curled one out in her handbag on the way out 

Well.. along with nsil bars, dog grooming, letting agents have been the other addition to the high street over tge last 10 years.

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2 hours ago, Bear Hug said:

Agents and landlords are fijcked

I agree.

There is also a secondary but more immediate impact: in expectation of the fees ban, the tenants (such as myself) who are aware of the ban will stay put until it comes into force.  While we may still suffer with paying renewal fees, the fees at commencement of the tenancies are far higher. 

Therefore there is less moving of renters and therefore there is an immediate hit on the estate agencies' fees.  However, there is also some immediate benefit for landlords from tenants no moving sooner than they would have otherwise.

Better option: tell landlord you're not renewing and you're not moving out till fees ban law comes in either. So he might as well renew for no fees now or let it run over to a month to month tenancy

If he takes you to court it will be 3 months till its heard anyway. Especially if you write in to court and tell them rent is being paid and will continue to be paid up to hearing date. 

Landlord would be mad to go to court if you're still paying rent every month. Judges like tenants that pay rent more than they like greedy landlords Imo.

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As a landlord (yes I know scum etc) I’ve offered nice long tenancy to my tenants, at just below market rate. And I’ll pay any fees no problems because I’m barely leveraged. 

 

 

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  • 296 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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