Posts with tag: private rental sector

PRS still needs work despite Tory win

Published On: May 14, 2015 at 4:44 pm

Author:

Categories: Landlord News

Tags: ,,

The result of last Thursday’s general election seemed to be generally well received within the property sector. However, there are still some that argue a number of uncertainties facing the private rented sector will need be addressed as a matter of urgency.

That is the view of John Stewart, policy manager at the Residential Landlord Association (RLA), who has listed a number of private sector issues that he feels should be high on the Government’s agenda.

Concerns

Firstly, Mr Stewart wants to see a continued rollout across the country of the new proposals from the Immigration Act 2014. This requires landlords and letting agents to check on the immigration status of their tenants, or face hefty fines. The initial trial of the scheme is due to finish this month and Stewart said that the RLA would be conducting its own assessment of the trial by asking landlords for feedback.

Mr Stewart also wants clarification on the proposal to make it a criminal offence to prevent sub-letting as part of a tenancy agreement. He said that his organisation has already raised concerns about these proposals and would expect the government to consult with the private rented sector before pressing ahead with these plans.

PRS still needs work despite Tory win

PRS still needs work despite Tory win

Amongst his other concerns were the proposal to extend the Right to Buy scheme, while additionally lowering the benefits gap. Mr Stewart was very concerned about figures that suggest for every ten council houses sold during the last government, only one was replaced. He believes that if social housing stock continues to fall, more benefit tenants will live in the private rented sector.

Concluding, Mr Stewart warned that, ‘with a majority of only twelve seats and party splits over the European referendum, it is far from certain that David Cameron won’t need allies in other parties. In the short-term, landlords may breathe a sigh of relief, but there could still be choppy waters ahead.’[1]

[1] http://www.rman.co.uk/latest-news/article/prs-could-still-have-choppy-waters-ahead-despite-election-result

Lettings Sector Petition goes to Scottish Parliament

Published On: May 12, 2015 at 3:24 pm

Author:

Categories: Landlord News

Tags: ,,

Lettings Sector Petition goes to Scottish Parliament

Lettings Sector Petition goes to Scottish Parliament

An association representing the private rental sector has organised a petition to be put before the Scottish Parliament to prevent the introduction of rent controls.

The group has the opinion that “there is no role for the regulation of area-based rent limitations in Scotland”1 and has been launched by PRS4 Scotland, a pressure group including letting agents, landlords, portals and investors.

The issue was raised after the current government consultation, which closed on Friday, included the subject of rent controls.

Veteran letting agent David Alexander is a member behind the petition. He says that politicians could find that tenants or landlords do not accept rent controls.

He states: “Potential landlords will be scared off from entering the sector while many existing ones are likely to disinvest, which can only lead to a reduction in stock.

“At a time when young couples are finding difficulty in raising the large deposits required by mortgage lenders, what we need is more, not less, homes for rent.”1

Alexander is also against efforts by Scottish MSPs to stop landlords repossessing their properties unless they want to sell it or move in themselves.

1 http://www.lettingagenttoday.co.uk/breaking-news/2015/5/lettings-sector-petition-goes-before-parliament

 

 

 

Does the Rental Sector Really Need Fixing?

Published On: May 1, 2015 at 11:56 am

Author:

Categories: Landlord News

Tags: ,,

Labour’s rent control policy would cause landlords to leave the market and therefore make things worse for renters.

Commentary on the private rental sector indicates that rents are spiralling, there is a shortage of supply and young people are having to live with their parents into their 30s.

If this was the case, it wouldn’t be surprising that Ed Miliband wants to push his rental control plans to the first Queen’s Speech. By the summer, the government could be setting rents for Britain’s 4m private tenants.

However, the big problem with this policy is that these observations aren’t really the reality. There is no evidence to suggest that rents are surging. If this were a problem, rent controls would make it much worse. If the caps failed, then more intervention would be called for.

Mr. Miliband is proposing that rents increase only by the rate of inflation during a tenancy agreement and that tenancies are longer. It seems that Mr. Miliband believes rents have been spiralling ahead of other prices.

Does the Rental Sector Really Need Fixing?

Does the Rental Sector Really Need Fixing?

However, the Office for National Statistics (ONS) revealed on Friday 24th April that rents are hardly rising at all in real terms, and could be falling.

Data from ONS indicates that rents rose 2.1% around England in the last 12 months, 3.2% in London and slightly less in Scotland. Wales’ increases were much less. 2% national growth is not serious.

This figure is higher than general inflation, which is currently at 0%, but it is less than for example the rate of increase in hotel and restaurant prices, which rose 2.4% annually.

Rents are in fact increasing at a substantially lower rate than the price of buying a home, which is growing 8% per year. Rents are not out of line with the rest of the economy, and renting is becoming more appealing.

Since 2005, rents have grown from 90 on the ONS index to 105, excluding London. The number rises to 110 when including the capital. This makes an increase of around 17% over ten years.

In the same decade, overall price level has grown by 27%. Therefore, rents are actually decreasing compared to the other things that people buy. But what about wages?

Real wages have been stagnant in the last few years, but over the past ten years, they have risen by over 17%. This is also true of those earning the least. Minimum wage, for example, has increased from £5.05 in 2006 to £6.50 now, a rise of about 30%. It will probably grow next year too.

Therefore in real terms, rents have gone down. One factor driving down the cost is that the amount landlords need for financing the purchase of a property has declined in the last decade. The cost of supplying the product has fallen so rents have too.

Furthermore, supply is increasing. There are currently 3.8m private homes for rent compared to 2m in 1999. The total number of homes has grown from 20m to 22m. With rising supply and falling prices, the market seems to be working well.

Even if the market were negative, rent controls would make matters worse. Landlords would leave the market. The reason rents have risen only slowly is that many buy-to-let investors have been entering the sector. If landlords begin selling their portfolios, prices would increase again.

Taking away tax relief on wear and tear is another policy that would not be welcome. It would give landlords a reason for not maintaining their properties.

Having the state controlling prices does not improve the market, and can often make it worse. These plans would also cause spiralling regulation. There will be demands for more controls, and the government would then be setting rents.

Those looking for flexible accommodation do prefer to rent than buy, and their market is working well for them.

It is clear that the country is in a housing crisis; we do not build enough homes and the sector is crowded with regulations. What would be better for the market and the tenants is to remove political intervention.

Changes in the Scottish Rental Market

Published On: April 28, 2015 at 8:30 am

Author:

Categories: Landlord News

Tags: ,,

Changes in the Scottish Rental Market

Changes in the Scottish Rental Market

The Tenant Deposit Scheme was introduced and safety measures implemented. Landlords should be aware that more changes are expected due to the Scottish Government making a better private rental sector.

The Tenant Deposit Scheme means that all deposits must be put into a central holding system rather than be held by the landlord or letting agent directly. Requirements for fire prevention in properties were also introduced to protect tenants.

The private rental sector is continuing to expand and is becoming an intrinsic part of the Scottish housing system. It is common to experience either a strong rental market or strong sales market; however, Scotland is seeing strength in both.

Scotland, particularly Edinburgh, is an appealing investment option, and an increase in demand for longer tenancies is seeing a growing sector. People need longer to save for deposits for buying a home and also favour the flexibility of the private rental sector.

Landlords, letting agents and tenants are welcoming the changes, which will make the sector fairer for all. The regulations hope to make tenancies more secure for renters and protect landlords and their tenants.

The Scottish Government is consulting with the public over the changes. The first consultation took place last year and the second consultation paper can be found here: http://www.gov.scot/Publications/2015/03/6142

 

 

The Private Tenant Tackling the Housing Market

Heather Kennedy, a private tenants’ rights campaigner, says that politicians do not listen. She is taking a stand against the system with direct action.

Heather, 31, is a charity worker who moved from Leeds to London in 2011. When she tried to find somewhere to live, she was faced with a problem.

“I’ve been renting all my adult life, since I was 17, but I was struck by how much more difficult it was in London because the imbalance of power between landlords and tenants was so much more stark,” she explains.

Heather and her friends felt that the market was against them, so they started researching their legal rights. They wanted to know what they could do about their situation and help others who were also struggling with housing.

She says: “There were three or four of us and we all had some sort of housing problem at the time. I had a completely hopeless landlord who not only didn’t do any repairs, but didn’t reply to any of our phone calls. We just felt completely powerless.”

Heather was shocked at what she discovered: “Not only have you got a legal system that totally weights in favour of landlords, but you haven’t even got power as a consumer. We realised that our housing rights were so few that actually this was going to have to be about calling for change to the system.”

In 2012, Heather established the private tenants’ rights campaign organisation, Digs. Currently, the group has over 250 members in Hackney, East London, where Heather and her friends live. Other groups fighting for renters’ rights around the UK are Liverpool Generation Rent and Oxford Tenants Union.

“I got really sick of this idea you’d hear from politicians and from the media and charities, that private renting was all for students or comfortable young professionals,” Heather says. “And yet I was seeing people around me having a really difficult time.”

She continues: “Maybe some people are doing it because it’s flexible and it suits their lifestyle, but the things they have to endure as renters are completely unacceptable.

“I started volunteering at a local soup kitchen and realised that about a third of the people there were in private rented [housing]. It really struck me that the imbalance of power is much worse the lower down you get in the market, so if you are living really at the bottom end of the market, that’s where you’ve got the most exploitive conditions, you’ve got landlords that really have absolutely no respect for the wellbeing of their tenants and it’s all happening completely under the radar.”

When Digs began, it used traditional methods to try and influence housing policy. It wrote to local MPs, responded to policy consultations and organised meetings. However, nothing came of it. Activists from the group were excluded from conferences and events.

Heather says there was a moment when she realised that things needed to change. She had just put together a well-documented response to the Communities and Local Government select committee inquiry into private renting, but Digs was not asked to give evidence.

“We thought either they haven’t read it at all, or they have read it and it’s made absolutely no impact on their thinking,” says Heather.

Digs stopped lobbying after this, and decided direct action was a better approach. They were right. Before local elections last year, 60 people from Hackney shared their “galling experiences of renting” with Digs. The activists put together a set of demands from these stories and organised a protest outside the town hall to ask hopeful councillors to discuss the issues.

Heather explains how she felt: “It was like we were calling the shots. They basically had to listen to us. That spelled a shift in the power dynamic between us and the council. Since then, the way they relate to us is completely different. They actively seek our views and demands. We have regular meetings with them rather than having to badger them.”

The council listened when Digs wrote to it last year asking it to boycott the international property fair in Cannes, where councils allegedly sell British cities off to investors.

Heather would like Digs to build a local community, something she says private tenants do not have: “You’re moving around all the time, you’re not necessarily getting support from your community and your neighbours. You haven’t got the same kind of stake in your community.

“It’s very difficult to build connections and solidarity with your neighbours. I think that’s one of the reasons why politicians don’t like estates and prefer people living in the private rented sector, because it is very difficult to collectivise around any problems you’re having.”

Digs is also helping other London housing problems, such as the campaign against mass evictions and tripled rents on the New Era estate in Hoxton, and the group of single mothers, Focus E15, fighting for their homes in Stratford.

Heather says that these battles mark a turning point: “The genie is out of the bottle now. The awareness of groups like Focus E15 and New Era and the broader movement is such that people have an analysis for what’s happening now; it’s no longer just this incredibly unpleasant, very individualised situation.

“Seeing the way that the mums who have been affected have gone from people who were in individual housing crisis to people who are some of the most articulate activists about what is going wrong with housing in our society, is absolutely incredible.”

The growing number of housing campaigners today is well networked and poses a real threat to the system. The political parties’ housing policies in their election manifestos has not suppressed the anger over such issues.

Heather is opposed to the Conservatives’ right to buy policy, which you can read about here: /how-would-the-conservatives-right-to-buy-work/.

She says: “It’s very disappointing that Labour hasn’t unequivocally come out and condemned right to buy, as they should. It’s that kind of lack of courage and populism that is part of the reason why I think we’re going to have a low voter turnout, why I and a lot of other people have lost faith in those traditional routes of influencing policy, and why we are going to see many more occupations, eviction resistance and angry demonstrations.”

Heather also believes that Labour’s pledge of longer tenancies with stable rents will do nothing to tackle the affordability crisis. She says that the political parties are “still completely sold on the idea that the market will solve housing need”, but do not realise the importance of housing tenure.

Heather explains: “What’s absolutely crucial is an expansion not just of social housing, but specifically, of council housing.

“There was a real sense that people had a right to that housing, that it was theirs, which I came across as someone in my 30s and thought, that’s staggering; we’ve been completely robbed of the idea that we have any right to any form of housing.”1

1 http://www.theguardian.com/society/2015/apr/22/heather-kennedy-digs-private-renters-rights-campaign-group