Rent controls - good or bad?

[tzijlstra]

At least Labour are trying to do something, it may help reduce the bill for housing benefit.

 

It won't though, it will just increase in different increments.

 

Hypothetical: Let's say on 1 January 2016 the current tenants leave my 2-up/2-down in Hillsborough. They paid 520£ pcm, I suspect inflation is going to be under 2 % for the next three years, but I have to find money to redecorate/repair the house (1800£), I decide to increase the rent with 10% just to be sure that is covered (making the rent 570£ pcm - 50x36 is 1800). Normally I would have recouped that by annual increases of 5% to make the increase lower for my tenants and spread the rise of prices.

 

Tell me who is helped with this scenario here? I don't see it. If people want rents to be controlled then start at the maintenance and make it so that tenants are responsible for maintaining the house and keeping it up to standard.

 

This whole proposal is a wax nose, just like the silly pledge to freeze energy prices - want to know why prices didn't come down more than they did after oil hit a low? Because the energy companies could see Labour coming from ten miles off.

[loraward]

A private property rental market is vital I agree but not the way it is operated now. Every political party is rounding on the buy to let market as it currently stands and the reasoning is simple: aspiring homeowners are increasingly forced to compete with buy to let investors, the proportion of owner-occupiers is decreasing year on year and that isn't good politically.

 

Expect a massive backlash in the coming years because this can't continue.

 

Buy to let is sucking the life out of the economy. As a business at the scale it is now it adds nothing, deflects investment away from commerce and industry, and helps keep alive a proportion of the banking sector that does nothing but service the buy to let industry.

 

Things are going to have to change.

 

I agree, there was a time when most people had no choice but to rent from the wealthy. The advent of home ownership changed this and gave people a stake in their local area, we appear to be moving back to the old way of doing it, with an increasing number of people being forced to rent from the wealthy.

[Hippogriff]

Labour are trying to do something... it's just not a good, well thought-out, or savvy plan. It's designed to appeal to those who feel let down because they can't get onto the property ladder. While that feeling is understandable (I bought my first house for £59,000 back in 2000, it was just easier then) Government stepping-in with ideas like this probably isn't going to help very much.

 

That said, I do not just criticise Labour... the Conservatives will bring in Universal Credit and that has "disaster" written all over it for many Landlords who let to people who simply cannot manage their own affairs. Another forum had a story of a Landlord who had a Tenant who received their first Universal Credit payment (not in Sheffield, obviously) which includes their rent (which had previously gone direct to the Landlord) and the Tenant promptly went out and spent all of it in a single afternoon's splurge... leaving the Tenant, the Landlord and Society as a [w]hole in a bit of a pickle / hole. This was not a Tenant with anything like learning difficulties or someone who might need a bit of additional support to handle their money - it was just a normal young Tenant who thought - "I'll spend all this and go mad, what are the actual consequences for me, anyway, I just don't care!"

 

---------- Post added 27-04-2015 at 08:04 ----------

 

...an increasing number of people being forced to rent from the wealthy.

 

Landlords with a few properties they let out will not be especially wealthy - for the most I suspect they are people who look at their life longer-term and have decided they need to do something different than just pay into a pension that is likely to be worth very little in their twilight years. These folk could be just much better planners... not landed gentry. Most BTL Landlords today (the majority in a mode average sense) have 1 property.

 

These Landlords would probably not be Landlords if they could help it - being a Landlord is a largely thankless task and isn't as lucrative as the people renting from them seem to believe. Not a sob story, by any means, it's just not all gravy.

 

Most Landlords will pay their fair share of tax too... an extra 40% kicker (for most) going to HMRC on all that profit.

[psynuk]

Tell me who is helped with this scenario here? I don't see it. If people want rents to be controlled then start at the maintenance and make it so that tenants are responsible for maintaining the house and keeping it up to standard.

 

 

I'm not sure why that would be a good idea, I know a lot of tenants treat the property like their own home (in both the good and bad ways) but the single greatest benefi for being a tenant is, or at least should be that you've already paid for the maintenance in your rent.

 

Some landlords are simply scum, who view the tenant as part of the business and an inconvenience at best and tend to do the least amount possible to maintain their income.

The tenant paying the mortgage on the property and the maintenance and the bills, whats the point of a landorld in this scenario except as a leech?

I think I'd rather see the government front the deposit and the tenant have to pay it back.

[Justin Smith]

Labour intends to bring in rent control, which I think is a good idea, but I'm surprised at the flimsy attempts to destroy its credibility.

 

The intention is to allow rents to rise only by the rate of inflation for the next 3 years, but anyone would think they'd promised to give them away free judging by the hysterical reaction.

 

Surely responsible landlords would think Labour's proposal was only fair. People are struggling with the high rents as it is. Only the sharks would object, and say they can't afford to maintain their properties on this.

 

What do you think?

 

Rent controls ? Telling private businesses what to charge for their services ? Are Labour off their heads ?

I am a reluctant landlord (the shop I bought has two flats over it) and anyone who thinks that the present balance of rights / power between landlords and tenants is in favour of landlords knows absolutely nothing about the subject. The balance is already skewed in favour of the tenant so much that if anyone asks me whether they think they should go in for a "buy to rent" my reply is don`t bother. If you get a good tenant it`s fine, but if you get a bad tenant it will ruin your life (till you get him or her out, an expensive and time consuming business).......

The only way to decrease rents is to increase supply, the only way to do that is to encourage more landlords not less. This present Labour lot know sweet FA.

[loraward]

 

Landlords with a few properties they let out will not be especially wealthy - for the most I suspect they are people who look at their life longer-term and have decided they need to do something different than just pay into a pension that is likely to be worth very little in their twilight years. These folk could be just much better planners... not landed gentry. Most BTL Landlords today (the majority in a mode average sense) have 1 property.

 

These Landlords would probably not be Landlords if they could help it - being a Landlord is a largely thankless task and isn't as lucrative as the people renting from them seem to believe. Not a sob story, by any means, it's just not all gravy.

 

Most Landlords will pay their fair share of tax too... an extra 40% kicker (for most) going to HMRC on all that profit.

 

They are wealthier than the young people left with no choice but to rent one of their properties, and using their wealth to buy up the affordable properties is reversing the trend which moved property from the few to the many.

[Hippogriff]

Some landlords are simply scum, who view the tenant as part of the business and an inconvenience at best and tend to do the least amount possible to maintain their income.

 

Isn't this what most people and businesses would do - whatever they can to maintain their income? Charities, even.

[loraward]

The only way to decrease rents is to increase supply, the only way to do that is to encourage more landlords not less. This present Labour lot know sweet FA.

 

More landlords buying up the available properties will just increase the number of people needing to rent.

[Hippogriff]

They are wealthier than the young people left with no choice but to rent one of their properties, and using their wealth to buy up the affordable properties is reversing the trend which moved property from the few to the many.

 

I'd just re-iterate that the overwhelming majority of Landlords have 1 property they let out. I cannot quote a figure to you, but it's really high - like 80%. Those people are, mostly, just doing what they can to have a proper income in their twilight years... and not be depending upon the state, as much.

 

P.S. - I found the Department for Communities and Local Government - Private Landlords Survey, which says - "More than three quarters (78%) of all landlords only owned a single dwelling for rent..."

Edited April 27, 2015 by Hippogriff
Added P.S.

[loraward]

I'd just re-iterate that the overwhelming majority of Landlords have 1 property they let out. I cannot quote a figure to you, but it's really high - like 80%. Those people are, mostly, just doing what they can to have a proper income in their twilight years... and not be depending upon the state, as much.

 

I fully understand why they want to buy cheap properties and rent them out, but that doesn't change the fact that they are using their wealth to acquire property and that action prevents the younger generation from acquiring wealth through home ownership.

 

---------- Post added 27-04-2015 at 09:20 ----------

 

P.S. - I found the Department for Communities and Local Government - Private Landlords Survey, which says - "More than three quarters (78%) of all landlords only owned a single dwelling for rent..."

 

Which means they own two dwellings more than the people that are forced to rent from them.