x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button
award
award award
award award

TODAY'S OTHER NEWS

Is Boris Johnson trying to force landlords to evict and sell?

A prominent Conservative supporter and expert in the private rental sector has posed an interesting question - is Boris Johnson trying to push landlords into selling up and thus fulfil his pledge to create a ‘Generation Buy’?

Dr Rosalind Beck - a well known advocate of the rental sector, a doctor of Criminology and a Conservative Party member in South Wales - poses the question in an article on the influential Conservative Home website.

Johnson recently announced that he wanted to turn young renters into young buyers by encouraging 95 per cent mortgages for up to two million first-time buyers - many of which have been ‘resentful’ tenants in his opinion.

Beck questions whether many current tenants would be in a position to purchase even if there was widespread mortgage availability, and then goes on the attack about the government “consistently damaged and misguided policies” towards the private rental sector.

She says that judging from the Prime Minister’s recent comments “the grand plan is to drive landlords into evicting their tenants in order to sell.”

Beck believes the most vulnerable tenants in such a strategy would be those in low cost smaller homes, who - if evicted - would likely have to be housed by the social housing sector which successive governments have run down in size and funding. 

“The majority of these would not be in a position to buy; they couldn’t save a five per cent deposit, they wouldn’t meet mortgage criteria, millions rely on benefits, are on low pay, have a poor credit rating, are foreign nationals, or are of an age which would disqualify them” insists Beck, who says “home ownership is not on their radar.”

She then ridicules the idea of evicting existing private tenants and selling because the government itself has made it harder for landlords to sell up.

Referring to the current eviction restrictions, Beck continues: “The government has extended even non-payers’ rights to remain for up to two years in properties which therefore cannot be sold with vacant possession.”

 

The conclusion of Beck’s piece is given over to the emotive hyperbole used by Johnson and others to describe the virtues of buying over renting. 

“Emotive language … is not unusual in housing discussions, of course, with Boris Johnson saying it is ‘disgraceful’ that people can’t buy their own homes. This was a curious word to use and, looking it up, I found one definition of ‘disgraceful’ is ‘scandalous behaviour’” she writes.

“Who exactly has behaved scandalously? Developers for not building enough homes?  Why should they? Or is it private landlords for the crime of meeting the housing needs of more than nine million people by financing new-builds and buying old housing stock to refurbish for rent, while the government took a back seat? If the Government wants to blame anyone, it can start with itself.”

You can read the piece in full here.

  • icon

    Spot on. Ros Beck nails it as always. What is less clear is where the govt intend to house all the displaced tenants, because they’re playing their cards very close to their chest on this one and it’s still a complete mystery.

    Matthew Payne

    Been scratching my head on this one for a couple of years. If his most publicised plan is for tenants to buy the PRS units that may come on the market, that has almost no legs unless the government is planning a secondhand HTB scheme. Lenders have little appetite for risk at the best of times, and will not be interested in this sub prime lending unless HMG underwrites it. Cant see that either with the defecit as it is.

    The only solution in the short term, ie next 5 years until a decent supply of BTR and/or social units are built is to back off their assualt on the PRS to maintain todays status quo.

    Cant see that either though, but that's the point. 20 years of career politians focussed only on their own popularity before they get sacked has meant there hasnt been a plan, there isn't a plan. The only plans that have even been made have been the ones to win votes at the next May ballot box.

    As to the obvious Q, "what happens when the inevitable happens and we have a homeless crisis?" Well the current crop don't care, they won't be around to see it, hence they dont worry if there isn't a grand plan to fix it in years to come. All retired early, all safely aboard the gravy train in their West London pads with nice consultancy jobs amounting to a few £million a year. If Ros was ask to Mr Johnson today, what the plan would be to tackle 3 million homeless people in 2030, he would wryly smile back, with a knowing look that said, "We both know I wont be here then, so not my problem."

     
  • icon
    • 04 November 2020 01:29 AM

    Disgraceful behaviour by the Govt.

    They have made it abundantly clear since the introduction of S24 that Govt intends to eradicate mortgaged sole trader LL.

    Then it will attempt to eradicate mortgaged small corporate LL by introducing a policy that has the same effect as S24.

    Then they will attempt to eradicate unmortgaged LL.
    This will be the most difficult type of LL to eradicate.

    The Tories have no plan what to do with all the homeless tenants.
    They simply don't care.
    They naively believe that somehow these homeless tenants will be able to buy.

    This is simply impossible as the Tories well know.

    There seems to be a significant gap in their anti-LL ideology.

    They clearly haven't thought through the logical outcome of their bonkers policies.

    It is a complete mystery to me how the Tories believe they will be able to house the population if they eradicate small LL.

    BTR will NEVER be able to supplant the small LL.
    Why Govt believes they will amazes me.
    All the pension fund money in the world won't be able to buy up every rental property.

    But all LL must surely realise that they are out to get you.
    Create your defence strategies quickly because Govt intends to use CV19 as a great excuse to get rid of LL.

    This is why unlike the Scottish and Welsh Govt the English Govt will not assist tenants to pay their rent.

    The UK Govt fully intends to force LL out of business using the stratagem of preventing evictions.
    It intends to drive LL into the ground.
    LL had better wake up or they will be toast!!

    I wouldn't put it past this Communist Tory Govt to CP LL properties.

    When you think about it what Corbyn had planned for the PRS wasn't anywhere near as bad as what the Tories are doing to the PRS.
    Who'd have thought eh!?
    Never thought this is a sentence I would ever utter but next GE I can see me voting Labour for the first time in my life!!

    icon

    I won't be voting Cons either - for the first time. But, not for one moment, do I think that Labour will treat the PRS any better. Farage is rebranding the Brexit party to Reform UK and we all know that reform is long overdue in this screwed up country. Time to think about moving away from the mainstream parties. When I see people on the TV like Johnson, Hancock and Jenrick I realise there is no hope for the UK. I'm in my 70s and I've seen too many of these numpties!!

     
    icon

    There are plenty of un-mortgaged landlords. All businesses borrow to increase their operations and profitability. All loans need to have security and it often comes as a lien on the real estates of the borrower. Landlords use mortgages because the government has set up taxation to better handle them but property buyers of any sort can use any sort of loan.

     
  • icon

    The way I see things is that this government wants to bring back home ownership, by forcing landlords to selling, all these properties will be bought by first time buyers, least ways that would seem to be the theory. 50 Years ago the young left school at 15, very few went on to university, most went to learn a trade, apprenticeships, one day a week at a local college, most of us, boys and girls, started saving from day one, that isn't how the young behave today, it's all about living life to the full payed for by debt, flash cars on the drip, and credit cards . Very few snowflakes will ever own their own homes unless someone gives them one.

    icon
    • 04 November 2020 07:18 AM

    I started saving for my first property at age 13.
    The Govt introduced a First Time Buyers scheme where if you saved an average of £1000 over a certain period you qualified for a £500 interest free loan for 5 years and a £100 grant.

    Well by about 1983 I had saved the required amount and consequently ONLY because of the scheme was I able to just about afford to buy a 2 bed house in crappy Leyton!!

    It took me til age 23 to achieve this during which I saved hard and worked hard.

    No snowflake living high on the hog.
    I was very boring saving as much ad I could greatly facilitated by a parent who effectively provided subsidised accommodation which I paid for at reduced rates as it was accepted I was saving hard.

    So my dream of being able to leave home to buy my own house took 7 years.
    I could have bought earlier but I wanted to buy a minimum of a two bed house.

    Only by hard graft and a parsimonious lifestyle did I manage to afford my property.

    Snowflakes are simply not prepared to make relevant sacrifices to achieve homeownership.

    I never received any parental assistance beyond that of cheap home costs.
    I remember paying £7 pw for home costs.
    I was only earning £27pw!!!
    But I still saved the eventual deposit being about £2000.
    Nobody handed anything to me on a plate.
    It required dedication and commitment for me to achieve what was a distant dream of homeownership.
    Such attitudes are not evidenced in the snowflake generation.

    Laying the blam for GR at the feet of LL is clearly incorrect.

    But the Govt doesn't care about the truth.
    It knows GR blames LL for their predicament and Govt is only too happy to confirm the GR confirmation bias to achieve GR votes.
    It seems to believe that GR will vote Tory if they attack the PRS forgetting that 2.5 million LL are not guaranteed to vote Tory especially now there is a sort of 'normal' Labour leader now.

    The Tories need to be very careful how they treat the private LL.
    Their votes are far more important that GR ones who are highly unlikely to vote Tory no matter how much the Tories believe they will if they carry on attacking private LL.

    The Tories are playing a dangerous game!

     
    icon

    Spot on Andrew. Totally agree with that. It is clear that the labour policy of a right to buy has been adopted in a slightly different format. It’s almost like being mugged and forced by any means possible to give up what you have worked for. I object to the power of the state being used against law abiding tax payers.

     
    Mark Wilson

    Andrew you have your rose tinted glasses on today. Salary multipliers are too high, they use to be 3, 4 or 5 times in the 'good old days'. BTL speculation and ultra low interest are major reasons why owner occupation is not in the reach of many.

     
    icon

    Mark

    For generations, most working people have been unable to buy their own homes. Keeping families fed and clothed was a daily struggle for many before WW2.This eased up a bit for probably one full generation but it now seems more difficult again in many areas, but by no means everywhere or for every property. Evidently there is no current problem in affording copious amounts of food for the vast "bulk" of people, whether working or not.

    There are plenty of buying opportunities in auctions throughout the UK for those with the gumption to grasp them. Working people were undeniably poor up until WW2 but given the obesity epidemic, sky dishes, fancy cars, fancy holidays, costalot coffees and expensive mobile phones, the biggest barrier to home ownership for many is the inability or refusal to get their priorities right.

    For many renters, they don't want to buy and take on the responsibility of mortgages, maintenance, prohibitive stamp duty payments on moving house - compared to no fees at all on renting another property.

    PRS investors ( NOT speculators!) are providing a valuable and much wanted service and contributing to the mobility of the working population, although not enough of them seem to be prepared to exploit such mobility opportunities and go where the work is and just bemoan lack of local opportunities, ignoring those opportunities further afield.

    Perhaps if the benefits system, and especially the furlough schemes etc. were less generous then they would have more incentive to chase the opportunities that do exist. However it's easier to moan about those who have grasped opportunities past and present!

     
  • icon

    What Government doesn't acknowledge is that private landlords very often turn into developers. They bring disused property back into use, they convert commercial buildings, they build from scratch themselves and they will buy new-builds (sometimes off plan). All this adds to housing stock. By attacking the sector Government risks disenfranchising landlords and curtailing of a very important part of housing provision. I do wonder who's getting the backhanders.

    icon

    Excellent point John.

    These same derelict properties could have been bought by enterprising potential home owners, but that is too much like hard work for many of Generation Rent.

     
    icon

    @Robert...

    There are opportunities all over if you look. The longest term empty I have acquired was languishing for 14 years, the second longest 12 years. The first is now a family home, the second a high spec HMO housing 6 people. Even my own home was long term empty and was quite a state.

     
    icon

    I have bought several properties which others turned their noses up at.......and have had to hold my own nose in disposing of carpets saturated in cat pee.

    I always look beyond the mess and smell to the location and basic potential of the property.

    I once discovered a full freezer of food in an empty flat. Some meat and fish removed from it and left to rot behind the freezer ensured my offer was the only one on closing date!

     
    icon

    I was the guy in the auction room in the 90s that bought the worst property of the day, cracked walls, no problem to me, 10 yrs ago I bought a property that had been traded in to a well known national developer, no one wanted it, black carpets and a kitchen hand painted purple, other than that there really wasn't much wrong with it, odd what people turn their noises up at.

     
    icon
    • J S
    • 05 November 2020 07:56 AM

    There are many landlords however who do not buy derelict properties. Also there is nothing stopping developers renovating such properties (actually adding value) and then selling them on. Housebuilders would have no problem selling new builds to owner occupiers, landlords also buying simply pushes prices up due to lack of supply.
    A reduction in the number of landlords would result in more supply and less demand, therefore lower prices and there are plenty of tenants who would then be in a position to buy. Current house prices in relation to earnings are absurd and in a lot of areas young people, even working well paid professional jobs are priced out of the market. Sky high rents make it near impossible for them to save a deposit in a reasonable time frame, hence why so many that are able to buy are helped by BOMAD. Perhaps landlords investing elsewhere in the economy would enable some value creation rather than the ever inflating asset prices of the same housing stock at the expense of the younger generation.

     
    icon

    J.S.

    You're missing the point. Landlords buying good quality properties are competing with others who can also afford such properties - otherwise they wouldn't offer to pay as much as they do. They also pay a 3% (4% in Scotland) stamp duty penalty.

    The key point is there are PLENTY of lower quality semi-derelict properties available - but those who claim they are "trapped" in high cost rentals usually lack the gumption to grab them.

    In addition there is a government scheme to add 25% to any deposit saved by first time buyers. 40 or 50 years ago we had no government help and much higher mortgage rates (up to 15% at one time).

    On balance, I believe it's no more difficult for those with gumption, drive and initiative to get on the property ladder. The biggest difference is there seem to be far fewer young people with these qualities and with the right financial priorities.

     
    icon
    • J S
    • 05 November 2020 13:30 PM

    Robert

    More potential buyers will inevitably bid up prices. Those owner occupiers who can afford the houses in your example would then be able to afford a more premium house with less competition and so on and so forth in each segment of the market where BTL is reduced.

    Higher interest rates from the 80's are more than offset by the astronomical inflation in house prices. Lets be charitable and say that mortgage payments as a percentage of earnings are comparable, the following is not comparable:
    Deposit - Deposit required is far higher relative to disposable income to the extent that often gifted deposits are the only option
    Risk - interest rates could rise considerably resulting in worst case scenario bankruptcy for overleveraged FTBs, much less likely with 15% rates
    Mortgage Term - 35 year mortgage terms increase the effective cost of housing

    Finally, even if some FTB could potentially afford a "semi-derelict" house why should they other than because they choose to, because it is and should be a bargain. An efficient market would result in reasonable house prices and deliver good value. It is not acceptable that the professional well paid younger generation can only just afford a derelict house. People working hard and providing value in the economy should be able to comfortably afford a decent house.

    The market is dysfunctional and BTL is a big part of the problem, as the government clearly recognise.

     
    icon

    You're ignoring reality. You seem to think it's an insult to suggest those who can't afford the best to take the great opportunities provided in buying derelict or sub standard properties - which is exactly what most tenants moaning of the unaffordability of buying think - so no sympathy for those pleading poverty.

    If people can't earn enough in a 37 hour week there are another 123 hours available in every week and working a few more of them might get a deposit gathered together faster, as would cutting cloth to suit,cutting out a few luxuries or extravagances etc

    I wonder if you're one of those who expect everything for just a 37 hour week? It doesn't ( and has never) work like that.

    Extra effort has always been needed for extra benefits ( apart from the DSS kind!).

     
  • icon
    • 04 November 2020 06:52 AM

    Forcing LL to sell doesn't magically create FTB who can afford to buy.

    There are plenty of properties to buy now.
    Adding to the available stock won't make them anymore affordable for FTB.
    The issue of FTB is principally an affordability issue facing aspirant buyers in the SE.

    Well that is obviously because of the high demand in the SE.

    The only way FTB can afford to buy is if they are given substantial deposit assistance.
    There are lots of aspirant buyers who could afford the mortgage but have failed for whatever reason to save the required deposit.

    Forcing LL to sell won't facilitate FTB or former tenants to buy.
    Those people still have to live somewhere.
    They depend on LL to achieve this.

  • SCN Lettings

    With everything else like Section 24, Tenant Fee Ban and now looking to bring in EPCs as a minimum "C" from 2025 ( with LLs footing the bill) then the writing is on the wall for the PRS. LLs will be selling, and are selling up. All in the name of winning the Generation Rent vote. Supply is down, rents are up and it's not getting any better. This government and it's predecessor is doing more to cause homelessness than any other single cause.

  • icon

    @ Mark Wilson, I don't think you fully understood my comment, FTB are unlikely to be buying the properties landlords sell both for the reasons you quote and my reasoning as well.

    icon

    Mark won't entertain anything that doesn't support his incorrect theories Andrew.

     
  • icon

    Where are these 95% mortgages? My daughter is looking to buy a new build but the lenders will only lend 85%

    icon

    Those first few steps on to the housing ladder are very risky for all concerned. Lenders are not sure of you, borrowers are not sure of anything, some lenders are basically thieves, some borrowers have all sorts of dysfunctional ideas. It goes on. Everyone needs to become accepted in the money community whatever that is. Having a good deposit saved up is a very good start but a good record of payment is essential as well.

    That 15-20% lenders won't lend is their safety lien. They have full rights to seize the property of non payers and they can make back their lost costs when they sell the property on.

    My career is at end but in the past I was able to just ask for a mortgage and get one in minutes. My first mortgage was very different. We had to skimp and save to pay the instalments. Once we had a couple of years "clean record" we remortgaged to get rid of some unpleasant clauses in our first agreement and never looked back.

     
    Algarve  Investor

    Another hot air promise from Boris that won't be backed up in reality. See also Operation Moonshot, world-beating test and trace, etc.

    It seems to have been completely forgotten that Johnson announced the First Homes scheme earlier this year, another scheme for first-time buyers, which seems to have slipped under the radar again. That policy was equally thin on detail.

    Johnson had to come up with some grand-standing policy at the Tory conference and a surefire policy winner in recent years has been prioritising first-time buyers. He wanted his Help to Buy moment, or his Starter Homes moment. Putting aside the fact that Help to Buy has serious questions market against it, in terms of its long-term impact, and that Starter Homes never got started - with the Maybot failing dismally to get that scheme off the ground.

     
    icon

    Lenders will not lend 95% on a new build at the moment because they expect prices to crash by more than 5%

     
    icon

    95% mortgages are a thing of the past, far too risky

     
  • icon

    Mark, I would say the real problem is not mentioned although I have said before. The Government / Bank of England are the culprits, using the excuse & pretending it was a good way to control inflation nothing further from the truth, I mean reducing the Bank Base Rate below 4 or 5% which is what it used to be then you paid 2.5 / 3% above the for your loan, you knew where you stood property probably went up 2.5% pa. The affect of reducing the Base rate caused the problems we now have in the main. This abolished the Savers over night which is why they bought Property as left with no alternative home for their money and also the main reason why young people have no savings with no encouragement or incentive.

  • icon
    • 04 November 2020 15:17 PM

    I'm afraid that really this is a situation being caused by whinging SE GR.

    As far as I am aware property is eminently affordable outside the SE.

    But GR is not prepared to countenance buying in cheaper areas.

    Bizarrely GR could finally appreciate that with WFH they could buy in cheaper SE areas.
    They would still be about an hour train commute from Central London.

    Perhaps GR will realise they can be viable in those cheaper areas as tenants or OO.

    The allure of being near in distance terms to cities is somewhat fading.
    GR would do themselves a massive favour if they adjusted their horizons.

    Everyone else is with the new WFH paradigm.

    Perversely if GR wants to reside in city centres they may find they are the only ones there.
    Normal people are deserting cities for the country where space is available.

    The allure of a tiny and expensive flat in a city centre is rapidly fading.
    People don't want to live there anymore.
    London is deserted and will remain like this for the foreseeable future.
    CV19 has opened Pandora's box.
    Finally it has been realised expensive city centres aren't needed anymore.
    Economic activity can easily move out of London etc courtesy of broadband and laptops


  • Ruan Gildchirst

    BTL is dead, all LLs with any sense are desperately trying to sell now before the rush. Tenants are waking up that they can stop paying rent and it will take 2 years or more to get them out.

    The government is supporting tenants and even encouraging tenants to not pay rent. LLs are being forced to subsidise all the losses from the crisis

  • Ruan Gildchirst

    Even after the two years or however long it takes to get a court order for bailiffs, if the tenants says someone is shielding because possible cv19 symptoms then it’s back to square one

    icon
    • 05 November 2020 08:42 AM

    You may well be correct in your contentions.

    I believe you probably are.

    That being the case if LL respond as you suggest by selling off or changing to other letting variants where will all the eventually evicted tenants live!?

    If many LL are bankrupted as is distinctly likely where will their tenants go!?

    None of these evicted tenants will be buying ANY of the ex-LL properties.

    Who will house or will wish to house feckless rent defaulting tenants?

    Surely with the problems of getting rid of rent defaulting tenants as you have I believe correctly pointed out that remaining LL will be extra diligent on checking the quality of their tenants.

    It is very likely that future LL will find out which tenants were evicted and the reasons why.

    Perhaps it will become increasingly difficult for these rent defaulting tenants to source another mug LL?

    I guess we shall find out over the next 2 years.

     
  • icon
    • 07 November 2020 10:19 AM

    Of my 10 tenancies, not one would be in a position to buy. Yet, because of the slew of anti-landlord legislation, I am considering selling up, which is fine for those who can afford to buy, but that'll be 10 less properties on the market for rental for those who can't. The final nail in my coffin will be the forcing of landlords to meet EPC level C. In my view, this will turn out to be the biggest cause of landlords leaving the sector, particularly portfolio landlords. Given the Government's stated target of being carbon neutral by 2050, forcing compliance on new tenancies by 2025 seems arbitrary, unless of course you consider this target in the context of this article's views on Johnson's aims.

    In the absence of proper leadership, all Johnson can do is respond to the squeakiest voices, which tend to be from the left. The Tories no longer represent landlords (or free enterprise). Given the universal dislike for us, we are easy targets for virtue signaling policies based on little evidence designed to play to the gallery of voters. As a supporter of free enterprise, it should be my right to own property and use it as the basis of a business unfettered by state interference. Though, there is an alternative - some bloke called Marx wrote about it.

  • icon

    Boris & co are not conservatives, we no longer have a conservative party.

icon

Please login to comment

MovePal MovePal MovePal
sign up