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Political Heat Intensifies in the Property Market

An uneasy relationship exists between UK politicians and the residential property market. Emotions have been running particularly high recently.

More details were published last week by the government setting out its vision for the private rented sector. Meanwhile, both main political parties are involved in an increasingly heated battle over boosting the delivery of new housing.

Building 300,000 new homes per year (last done in 1969) is put forward as a way of bringing down house prices. Never mind the questionable economics of that claim in a country of 25m homes, the debate itself feels lopsided.

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The discussion has focussed on building on the country’s Green Belt, which has received Labour’s caveated endorsement. Meanwhile, the Conservatives have said they will protect green space amid rows over NIMBYism.

All valid topics of discussion but they ignore the fact that the delivery of new homes is overwhelmingly governed by demand. Demand is regulated by the prices set by housebuilders, which are linked to the second-hand market. 

These, in turn, depend on the state of the economy and the lending market. It’s nothing an Economics A-Level student couldn’t tell you.

Yet the debate has overwhelmingly focussed on more marginal supply-side initiatives.

Building more truly affordable homes of the right type in the right place is a tremendously complex issue. Which admittedly is not a great soundbite for the evening news.

Buying land at existing use value is one possible facet of the response. Such an approach for affordable housing is the subject of an amendment to the Levelling Up and Regeneration Bill, which is currently going through Parliament. Buying land at “no scheme value” was good enough for the last wave of new towns, including Milton Keynes, that were built under the 1946 New Towns Act in the 1960s.

Meanwhile the Renters Reform Bill is designed to tip the balance of power back towards tenants.

After nearly doubling in size since the early 2000’s, the private rented sector has accounted for about one fifth of households in England since 2013-14, according to the latest English Housing Survey. 

So, it seems inherently fair that legislation should reflect the fact there are a growing number of renters in the country.

However, before the publication of the Bill last week, landlords were understandably concerned that a proposal to scrap no-fault evictions increased the risk of them not being able to get their property back. Examining the fine print, that’s not quite the reality.

“Getting a property back to live in or sell would still be a landlord’s right,” said Beverley Kennard, head of lettings operations at Knight Frank. “There are many reasons why a landlord would want possession back of their property and this would now happen under a re-worked system. We are also pleased to see the Bill will look to introduce new grounds for getting a property back, including rent arrears and anti-social behaviour, which should give landlords even more comfort.”

One issue of concern is that tenants may be able to serve a two-month notice at any time. 

“There is still a long way to go with this Bill and the industry will challenge the government on how practical such an approach would be” said Kennard, who estimates it could take 18 months for the legislation to apply to new tenancies and a further 12 months for all existing tenancies.

One thing the government will be acutely aware of is how fast rents have been rising over the last two years due to a lack of rental properties. Landlords have left the sector after a series of tax changes in recent years means it has become more financially punitive for them, and the pain has been felt by tenants. They won’t want more landlords to follow suit as a result of these latest proposals.

One fifth of households in England is a lot of voters.

* Tom Bill is head of research at lettings agency Knight Frank *

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    I am still sure that the loss of s21 will not be mitigated by new powers for ASB 👮🏻‍♀️ Currently we need ZERO evidence to evict for ASB with a s21…. This will not be the case in the future, landlords are unlikely to get this. Then what ?

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    The fact that the Private Rental Market has doubled in size is because before the Government attack on Landlords the system was working and successful . That`s why it accounts for 1/5 of the housing in the country.
    The reason rents rose initially was because of Government Legislation and Taxation . Also allowing councils to declare wholesale areas for what was intended to be Selective Areas for no other other reason than Financial Gain.
    The reason Rents are rising now is because of the Government appeared not to consider how section 24 would effect the rental Market when interest rates rise.
    Section 24 , and the whole Renters Reform is the wrong Policy at the wrong time

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    Agents perceive everything from their own perspective; it is a quite different one from that of landlords.

    As a landlord, my primary concern is retaining control of my property. I have no intention whatsoever of handing it over to any tenant for life. Selling is a much more intelligent course of action than doing that.

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    I share Ellie's concerns about loss of control. Particularly as my properties are not just any old BTL ones I have no connection to.

    Tom Bill's point about "One fifth of households in England is a lot of voters." may be right.
    But with the allegations of so-called pro-tenants groups who are anti-LLD, and still bleating like ignorant stupids, will the scale of selling up by LLDs sink in before the next general Election?

    Article is one of the most thoughtful I've seen for ages. Though it could say more, but then might be too long.
    E.g. Now LLDs are not buying 'off-plan' plan like they did, and developers -particularly of blocks of flats like a % of off-plan sales in the bag before building; what will this do to the supply of new builds that the Govt. target wants more of. It will decrease it.

    I won't start on other/better alternatives to existing use / 'no-scheme' value here....

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    If ownership rights are eroded and I can’t fully control my property assets then there’s no point remaining in the BTL business. So I am selling while it’s still possible.

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    Still at odds as to why the Government decided to abolish affordable renting, everything they done in recent years increased rental cost.
    Now talk about building affordable homes even if it were possible, they’ll add on their costs, regulation’s and Schemes to make them unaffordable again.

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    Read THE SMALL PRINT our devious underhand politicians have written into the legislation
    Rent owing as a result of housing benefit non payment will "not count as arrears" for the purposes of court proceedings
    So a tenant can owe us tens of thousands in rent and we will be banned from using any of the procedures that the government promised us will replace section 21
    If you think these g'sters will ever let any of us have any of OUR PROPERTY back you need counselling

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    People complaining about removing Section 24 and rightly so.
    However its the people with interest only Mortgage’s had an easy ride and everything allowed as a reduction for income tax returns + many had loans for only 1 or 2%.
    I had Commercial Bank loans usually @ 8% variable, which meant approximately half the money I was paying back was against the principal, so I had to pay income tax on it at my top rate even though I didn’t have it, it was gobbled up by the Bank and I had to work all the hours under the Sun to service the debt, no tax relief for me.
    At the same time I had an Indian gentleman & his Tibetan mistress occupied the complete house and not paying rent for a year while I had to keep paying to Bank £858.00 pm. He drove around in his BMW and she dressed like a queen working at Selfridges, Oxford St.
    I am now nearing the end game
    Property Confiscation by Mr Gove with the silver spoon in the mouth as a thank you for the Services I provided.

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    I agree with most of the points above, but still where is our voice explaining it from our point of view. This Agent has covered a small fraction of our concerns but is still just scratching the surface. Henry S raised some points that I had not fully considered.
    It is our investment and we should be allowed to be in total control, though I agree need to be transparent in our decision making.
    If we have a rogue tenant then the law should be swift in implementing a fair outcome. This has been eroded over the years and Landlord's have resorted to Section 21. Now this being removed has scared us as we know how inadequate Court's have been. No amount of promises will change our minds.
    Section 24 has crippled a lot of Landlord's and is a very unfair tax. It does not matter whether you are interest only or had commercial loans, if you are taxed without being able to take away the loan payments it is only going to push up rents, and weaken us financially.
    Government action encouraged by Shelter and others have caused rent rises. If they had left well alone none of this would have happened. If they had not allowed 100% mortgages and other incentives the market would have remained more settled.
    Any Government needs to think long and hard before they tamper with the housing market and they really really need to look at what they have fooked up so far and hopefully have a better understanding moving forward. Incidentally I have zero hope of this happening!
    We have all worked are arses off to get where we are with our properties and for these Polictician's to spout about unearned income is a gross misunderstanding of a working persons abilities and just goes to show how out of touch these morons are. Very few of us, if any have had our properties handed to us on a plate, whether we work extra elsewhere and pay someone to look after our properties, or whether we work on them ourselves, it is still our work and our money and we need the Politicians to know this.

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    There’s no point in waiting for someone to raise our concerns - I think it’s not going to happen - as unlike the NHS and other associations who fight for their members’ rights, ours don’t. May be we should start something on internet, and connect, and go viral, express how this tenant-landlord balance is going completely insane, and how we have all struggled, struggling with a legitimate business, but something the government does not think is a business like any other, and are punished by financial and housing regulations and stamped down to be proven as 95% of bad apples, and every tenant is ill treated by us, so we can be punished in turn with all the taxes and harsh regulations etc etc. that is the only way this will reach the government, the wider audience, and may be the public too who will atleast know the truth that we are all not landlords like the medieval times coming over horses and beating up the poor farmers and grabbing their lands and the government is like Robin Hood. My God! Where is this country going? We need legitimate questions answered - why are we the only business that cannot have tax relief on expenses for the business, when EVERY OTHER business can:?
    What about tenants that do not look after properties or couldn’t care less? What about them causing mould, damp, wreck, not look after pets and let the house rot, don’t follow safety procedures that have been put in place spending so much money, only to smoke inside, or leave a candle burning or using fire appliances for fun?? Un co operative tenants? Those that don’t put heating on to avoid paying bills, so leaving house cold and getting mould? WHY IS It NEVER THEIR FAULT? Why is it always the landlord’s onus to prove anything and everything and never the tenant’s? Why can’t we ever claim anything from the deposit as the system is such that you cannot ever prove all the true things that deserve the claim? How can they change policies as and when they decide to, that affect businesses in a very bad way. Policies should not be changed with every party as they wish!! How can they have the right to say that if our houses now don’t meet the EPC grades required as it changes now, we can’t let them? How many people have invested in btl properties before that - if they don’t have the money to do it, or if the properties are sooo old that you cannot realistically do that, how is it right that the rules say you cannot let it - that is a knife on the throat saying we don’t care, if you can’t do it, don’t let it - either way, you lose!!
    We have to get someone to answer our queries!!!! We need to gather strength ourselves to fight for us!!

    Robert Black

    I agree with you I currently have excellent tenants in my property which is a lot of miles away I don't have an agent They have been in there for a lot of years When they have a problem they message me and we sort it together When they move out I will be selling as the government has made it too risky to let it out again

     
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    SELL SELLL SELLLLL

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    Not sure what is going on, but bailiff actions have been suspended for the foreseeable future in London (from the Central London County Court). The reasons given are health and safety concerns. Apparently they need PPE?

     
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    Not sure if this thread it the right place to add this but I have just had confirmation from our local REFORM candidate that "we must encourage landlords back into the market by reversing the tax changes and the legislation currently working its way through Parliament. We need to make it much easier to turn empty commercial premises into apartments, and we need make it easier to evict disruptive tenants."

    This is the only candidate I have openly heard express this opinion -
    Reform are currently working on filling candidates for all constituencies for the next GE. As we have not got a real mouthpiece standing up for us as Mr Beadle is never going to do this unless it benefits his student lets can I ask every Landlord on this forum (assuming they agree with the above REFORM statement) to contact their local REFORM candidate and see if they can get the same commitment (- REFORM do not operate with a whip so it will be up to individual candidates if I understand the system correctly. I understand Richard TIce raised the issue at a dinner in Derby recently!



    Peter Why Do I Bother

    Think Conservative will lose a lot of votes to reform in the next election. Good points Catherine

     
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    Only snag is that if the Renters Reform Bill is in force before the next election which looks likely, then existing tenants would have the security of tenure associated with that legislation. Only new tenancies would be governed by new legislation (if the Reform Party did introduce it) unless it applied retrospectively which is not the norm.

     
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    @Ellie Edwards - yet ironically they are applying new legislation to our existing tenancy agreements which is exactly the same thing isnt it?

     
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    It is the same, Catherine, but the legal principles seem to apply differently with respect to tenants' rights.

    However, we should have time to serve Section 21 notices with respect to existing tenancies if we are not prepared to operate under the current Renters Reform legislation.

     
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    Bailiffs suspended sounds more like the Council leaning on the Court to help avoid any more homeless people they do not have houses for!
    This is only the start of the Tsunami of homeless people created by Mr Gove!

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    If we have the court order what's to stop us throwing the offending tenant out ourselves?

     
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    Apparently, the court order has to be enforced by a certified enforcement agent acting under the warrant or writ of the Court.

    If the county court bailiffs are no longer working it is possible to apply to the High Court for their bailiffs to act.

     
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    It costs more in the High Court than the County Court though apparently.

     
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    Ellie. They don’t need PPE what they need is to reinstate Section 21 fully, Remove Section 24 unfair and divisive, Scrap Gove’s Borough wide Selective licensing , Scrap Gove’s Renter’s Reform Bill discriminating against Private Landlords who house 9 million the back bone of Renter’s accommodation and self financed not costing the Government a cent.
    How simple is that to boost the economy.
    Increase Supply and reduce Homelessness at a stroke, goodness me that was easy why didn’t I think of that before.
    Simply Remove those four causes and housing problems solved. No need for Digitalisation, Accreditation’s Learning Courses or Redress Schemes, Sorry we have been doing it long enough.

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    You are completely right, Michael, but unfortunately, I think the Renter's Reform Bill is unstoppable now. It is very difficult to know what to do in the circumstances.

     
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    High Court Bailiffs are much better and quicker

     
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    Please sign the petition:

    "Reverse provisions in Renters Reform Bill to remove Assured Shorthold Tenancies"

    There needs to be an enormous number of signatures for this petition to get anywhere

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