Thursday, June 7, 2018

A market with compulasory participation for many is not really a market…

End Unfair Evictions - campaign launch Weds 13 June 18:45

Event on Weds 13 June from 18:45 to kick off campaign to end Section 21 evictions. Would help a bit to remove some uncertainty but the market would still remain hugely uncompetitive. Most people people renting privately have no other choice. You have to live somewhere but you're not allowed to build a home yourself or live in a tent. The non-profit option - council housing - has been dwindling when it should have been growing to avoid handing over £10bn unnecessarily to private landlords in housing benefit. And buying a homer is impossible for most renters, given the cost of land.

Posted by mombers @ 12:49 PM (3275 views)
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15 thoughts on “A market with compulasory participation for many is not really a market…

  • I have to say the whole system is broken. There is no security for decent tenants when 2 month’s notice is all that is required for a tenant to have to leave.

    But for a tenant that is at fault , who doesn’t pay for example, it’s also difficult to evict.

    There are all sorts of possible solutions for the tenants, including removal of s21, but for the LL they are stuck with having to go through the legal process.

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  • I think the difficulty to evict a bad tenant is far outweighed by the abuse and exploitation that tenants face. Also, once again the proliferation of amateur landlords has a lot to do with it I’m sure. A professional outfit will have all their ducks in a row with procedures in place to evict, and have the diversification advantage of a lot of properties to avoid the world ending if one becomes troublesome.

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  • Landlords are having to pay larger Tax bills following budget changes in recent years and I suspect tenants will suffer because of this (less money to re-invest to keep the property in decent state of repair etc…)

    A decline in property prices would add to broken system.

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  • @3 Good point. As we’ve seen, rents have not gone up, but an option is to skimp on maintenance. But the private rental sector is notoriously poorly maintained already (on average). Landlords cutting maintenance further just risks slipping in their own turds – don’t fix a roof quickly and you multiply the bill hugely when it caves in.

    There have also been more and more moves to enforce existing laws on maintenance and strengthen them. Maintenance has also been incentivised under tax changes. Believe it or not, you used to get a 10% wear and tear allowance whether you ran a slum or well maintained home.

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  • Leaseholder says:

    Scrapping the 2 month notice option will make it harder to evict a bad tenant who will be encouraged to play the system.

    The 2 month notice route was brought in by the Thatcher government to free up properties kept off the market by reluctant potential landlords.

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  • mombers…. ive seen it from both sides and tbh LLs dont have a monopoly on being ar5ewipes,

    It really depends on the specific LL and the specific tenants. Much like the general public you get good uns and bad uns on both sides,So no i dont think you can generalise.

    There’s even that TV show about it. So i think that a tenant that hasnt paid rent for x months is as bad as a LL that hasnt fixed the hot water for example.

    Any LL needs about 6 months to evict, so loses 6 months income. Dont get me wrong im not on the LLs side but there does have to be balance in any system. It strikes me there is an in-balance that can be corrected quite easily re Tenants – should TPTB be so minded , whereas the Crown Court system is overloaded, as anyone who has ever been on a jury can attest.

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  • tenyearstogetmymoneyback says:

    This is why I gave up renting. After two years of being the perfect tennant my second landlord decided “he could make more money from two flats” and sold the bungalow I was renting.
    Given price rises since 2011 he did me a favour though.

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  • Tenyearstogetmymoneyback says:

    P.s I even had the indignity of having to take time off work to show potential buyers around his bungalow It was either that or having them and an estate agent visit unaccompanied. Landlord lived in Jersey and normally let the lettings agency handle everything. They were equally pissed off about loosing one of their best properties and tennants.

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  • @5 making someone homeless is a much more serious affair than impairing someone’s income stream so it’s only right that eviction is a very formal process to avoid abuse. Because participation in the private rental sector is compulsory for so many people, the balance should be tipped in the forced participant’s favour and the monopoly providers held to a very high standard.

    A professional private rental sector operator handles evictions MUCH more effectively than an amateur. Having a portfolio of at least dozens of homes spreads the risk, and the operator will have experience and training in selecting the right tenants in the first place and in cases where eviction has to be done they know how to do it. Many sob stories from amateur landlords who choose the wrong tenant then stuff up the eviction process. And a more professional sector would vastly reduce evictions as they are very, very unlikely to sell and make people homeless as a result. Remember that section 21 is the leading cause of homelessness. It’s a case of a sector externalising a huge cost onto society. There is no low cost option available for evictees – non-profit council housing, self build or living in a tent.

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  • True – but you are forgetting the people who leave excrement over the walls the floors, take the fittings – lights, even wall switches.

    Am I exaggerating – sadly not, I personally know of companies that have to clean up this mess (literally) fumigate the place etc. Yes these are professional companies that have been employed via councils to provide large scale social housing. I also know of private renters that have abandoned a place where they have purposefully urinated over the carpets etc.

    Making someone homeless – well not really. Yes there should be further protections of tenants, but those people aren’t made homeless, the market takes care of them (other flats etc. albeit more expensive and/or yes inconvenient.

    If they are evicted, then the council do have a duty to rehouse them. They may be evicted via S21 for no apparent reason (e.g. as 10 years says as an example) or for very good reasons.

    It just depends mombers, but please don’t be naïve and think such nightmare tenants don’t exist. Sadly they do, im sorry you think they don’t. Ive actually seen both sides of this, and I can tell you that to have some tenant try to ruin the things you have worked hard for feels like a violation, much like a burglary. Im not sure how you differentiate “professional” from “amateur” anyway.

    Why should a LL have to suffer loss for providing a place to live at an agreed rent ? (you may think that rent too high – so do I – but there is no gun being held at someones head. I think, if the Tenant pays the rent and doesn’t adversely affect the property ex ware and tear, then (s)he should be protected – 6 month notice at the east for ASTs.

    Did you go tonight? Interesting proposals?

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  • @8 I was a landlord in a previous life and I had to evict two tenants for not paying, and yes, damage was left as well, albeit not nearly as bad as the well documented stories. My business model catered for this, I did not do my sums based on no voids, no maintenance and no bad debt so I was fine in the end. Just like any other economic activity, there is risk and the law can only do so much. Suppliers get stiffed, shoddy work gets done, bad products are sold. There are laws around all of these but they don’t prevent these things happening. Repealing Section 21 would not prevent eviction for non payment or damage to the premises. I don’t dispute that there are some dreadful tenants who have done dreadful things but there are laws to deal with them and they are a cost of doing business. Good risk management comes into play here – have significant enough scale that one bad tenant won’t bring the whole operation down. An amateur landlord with two properties could well default on their contract with tenant B if tenant A turns feral.

    Interesting last night, there were some terrible stories that demonstrate the power imbalance. One lady exercised her rights under the new rules to prevent revenge evictions. She complained about some serious problems and was immediately served a Section 21. She pointed out that the new rules stipulate that they can’t evict for 6 months after a legitimate repair request. They deliberately didn’t do the repairs for 5 months, then immediately served a compliant Section 21 after the repairs were made. There was a pattern of behaviour reported by many tenants in the same block, many people were simply too scared to demand that the landlord upheld their end of the contract. An incredible loophole was left in the law, it should be 6 months from the repairs being made, not reported.

    Another woman had twice been offered a choice between a rent rise and sexual favours.

    Surely in these cases it’s the landlord who should bugger off and the property taken over by a better provider. There’s no symmetry in the market. It is a huge thing to have to move home to ditch a bad landlord, this asymmetry allows really bad standards to persist. Why give excellent service if your customers are not in a position to demand it?

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  • >Why should a LL have to suffer loss for providing a place to live at an agreed rent ?

    I think this misdescribes what landlords do … which may account for the different perspective of yourself and mombers? They get revenue from monopolising a location, the value of which has nothing to do with their activities. On top of this, they provide some level of housing service, all too often at or below the legal minimum. If it’s justified that tenants pay the full market rate for the location amenity, it’s another question whether this should end up in private hands, rather than being returned to the community via e.g. LVT. The underlying problem here is the private property rights over locations on the full liberal model – rights to use, exclusion and sale. If it isn’t the landlord profiting from this it’s their mortgage provider or a seller.

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  • Nick – I actually think Mombers and I agree on most of this. I totally agree that there should be more protection than an AST offers – in terms of the term – maybe we should have a AMediumT tenancy agreement, and the only way a Tenancy should be terminated early should because of the poor behaviour of the tenancy. However, if the Tenant does behave badly he often gets away scot free as the courts only concentrate on the eviction (that’s what I have heard but if someone corrects me I would be happy to concede).

    Similarly there should be licensing of properties to ensure they reach a standard. This is all due to how the Government of the time (and successive ones thereafter) chose to fund (or actually not fund) social housing. As for LLs monopolising a location, to the extent they do, again this is because they were allowed to do so.

    Personally I have no problem with a LL earning a decent return on his investment, so long as the product supplied is fit for purpose – in the case of residential property – both at the start and throughout the term of the agreement. I do have a problem with them not maintaining the properties and the inflated cost of rent being supported by HB.

    In short I wouldn’t want a LL to become a multi-millionaire when to do so he is being subsidised, this alludes also to your LVT. I never liked George but you have to give him credit for attacking via S24. (albeit his reasoning was misplaced imo).

    As for Jacks comment – I just think some LLs already don’t invest in maintenance, whether or not the tax system means they will have less going forward. If they got

    Lets not forget the s24 changes will only affect highly geared LLs, either those that are recent entrants or those that have always increased gearing to add to their portfolio. In either case I don’t have any sympathy for them (as mombers said do your homework and assess the risk / reward).

    However, again if the property is repossessed by the lender, then I do think the Tenant needs to be protected – at least to the end of their tenancy agreement. That risk should, in my view , rest with the Lenders.

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  • @11 there’s no need for time limits on tenancies for tenants who uphold their end of the bargain. Rental demand is very steady so a landlord will always be able to find a tenant if the current one needs to move. Attempts to increase rents can be handled by offering the sitting tenant right of first refusal – so LL can’t kick them out by jacking the rent up by 50% when they have no prospect of actually getting it. If the LL wants to sell, sure they can evict. This route may well be abused but there’s little in it for a landlord having a vacant property with very little prospect of a substantially higher rent. And the dreadful revenge eviction abuse can be addressed with a ban on eviction for sale until 6 months after repairs are FINISHED, not reported

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  • Tenantsuper says:

    It’s not just the constant possibility of being evicted at the whim of a landlord which make renting such a horrible experience in the country.
    The contracts which tenants have to sign are all for the benefit of the landlord and discourage tenants from decorating as they may be penalised for even hammering a nail into the wall. Now that estate agents are involved in the process it is even worse for tenants. You will be charged to carry out referencing and credit check (benefit to the landlord not the tenant) you are charged to renew a contract (benefit to the agent) you are not able to end the tenancy with 2 months notice and will be charged by the agent if you do. When an agent arranges an inspection you will be charged if you wish to be there and want a specific time. The agent doesn’t make any of the arrangements for workmen to carry out maintenance so the tenant has to arrange and take time off work to do this. There is also no urgency to get things fixed and there is nothing tenants can do about it.

    Contracts often have a clause about the upkeep of the garden but there is no obligation for a landlord to make sure there are plants in beds or equipment with which to maintain. If a tenant knew they would be staying for years there may be some incentive to spend money on planting and equipment. Tenants are required to have the house professionally cleaned at the end of the tenancy and the expectation is that it should look like it is ready to sell/rent without any input from the landlord regardless of how long a tenant has lived there. It seems that agents feel able to write any money making clause into a contract because tenants have so few rights in the country they feel unable to challenge.

    If a landlord cannot afford to take some risk then they cannot afford to be a landlord. I find it incredible that landlords expect to make money without having and outgoing expenditure and to expect there to be no maintenance on their part is ridiculous.

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