Posts with tag: rent controls

Could rent controls kick-start a seaside town property revival?

Published On: May 3, 2017 at 9:57 am

Tags: landlords,rent controls,seaside towns,tenants,Tories

A new report has suggested that the Conservative Party should build their election manifesto around rent controls, in order to kick-start a seaside town renaissance.

The Housing and Finance Institute believe that dysfunctional housing markets are driving decline in many coastal communities.

Trio

The report suggests that a ‘toxic trio’ of substandard housing, high volume of renters and a lack of new jobs are leaving tenants and taxpayers overpaying for properties that are not worth the rent.

As such, the Housing and Finance Institute wants to see the introduction of new time-limited and more localised rent controls in the more less-off coastal communities.

It has called for a locally assessed ‘fair value rent regime’ that would reflect a property’s location and overall quality. The Institute is additionally calling for more support from central Government for councils with communities feeling the effects of failed housebuilding markets.

Could rent controls kick-start a seaside town property revival?

Skills

In addition, it wants to see more financial and skillset support from central Government for deprived locations-where housebuilders, developers and investors do not want to purchase.

Natalie Elphicke, chief executive of The Housing & Finance Institute, noted: ‘There is a toxic trio of abnormally high proportions of rented housing, for that rented housing to be of poor quality, and a lack of job creation. Dysfunctional housing markets are proving fundamental to the spiral of decline in many of Britain’s coastal communities – and something radical must be done to turn the tide.’[1]

‘The proposals in this paper can help to break up the concentration of housing poverty and attract new high quality building and investment. Housing can be pivotal to securing jobs, growth and reversing entrenched deprivation. In particular, a new fair rents regime would significantly speed up the renewal of the most deprived areas, drive a fairer deal for tenants and taxpayers – and kick-start much needed regeneration,’ she added.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/5/tories-urged-to-back-rent-controls-to-kick-start-a-seaside-town-renaissance

Majority of People Want the Lettings Industry to be Regulated

Published On: November 18, 2016 at 10:34 am

Author: Em Morley

Categories: Landlord News

Tags: lettings industry,private rental sector,regulations,rent controls,tenants

The majority of people want the lettings industry to be regulated, according to a survey for the BBC’s popular Victoria Derbyshire show.

76% of people believe the lettings industry should face tougher regulation, including controls over letting agent fees, lengths of tenancies, deposits and inventory checks.

Majority of People Want the Lettings Industry to be Regulated

In addition, 74% want rent controls in the private rental sector.

Yesterday’s Victoria Derbyshire programme discussed the lettings industry and the results of its study.

The survey, of 1,002 people, also found that 69% believe rent rises when a tenancy is renewed should be capped, while 63% want the standard minimum lettings term to be increased to 12 months.

The accompanying BBC news story looks at three case studies, including a family with three children who have moved ten times in the last 12 years, and a tenant who was given 28 days’ notice to leave his home of five years, but struggled to find the money needed for a deposit, rent in advance, and letting agent fees for his next rental home.

The Chairman of the Residential Landlords Association (RLA), Alan Ward, told the BBC that although the idea of rent controls may seem “attractive”, they would be a “disaster” in reality.

He adds: “All experience of them shows that they lead to landlords cutting investment or quitting the market, reducing both quality and choice for tenants. The way to moderate rents is to encourage investment and boost supply.

“There are already well over 400 regulations affecting the private rented sector, and the actions of successive governments is raising the cost of renting.”

He continues: “The problem is not about a lack of regulations, but proper enforcement of them, and we support local authorities in their efforts to root out criminal landlords.”

A spokesperson for the Department for Communities and Local Government also says: “This Government is committed to creating a bigger, better private rented sector, with up to £10 billion in Government-backed guarantees to build more quality homes for rent.

“We are doing this without the need for excessive state regulation that would push up prices and make it far harder for people to find somewhere to rent.”

The Government’s blacklist of rogue landlords, which will also be controlled by local authorities, will be in operation from autumn 2017: /blacklist-rogue-landlords-operation-autumn-2017/

The Valuation Office Agency released statistics on the private rental sector in England yesterday. It found that the median monthly rent over the past year was £650. London had the highest, at £1,473, while the North East is the lowest, at £480.

Rent Controls Would Spell Disaster for Tenants, Warns RLA

Published On: August 8, 2016 at 9:41 am

Author: Em Morley

Categories: Landlord News

Tags: housing crisis,private rental sector,rent controls,secure tenancies,Stamp Duty,tenants

Rent Controls Would Spell Disaster for Tenants, Warns RLA

Jeremy Corbyn’s plans to introduce rent controls and secure tenancies in the private rental sector would spell disaster for tenants, warns the Residential Landlords Association (RLA).

The Labour leader has vowed to implement rent controls and secure tenancies if he is elected Prime Minister at the next general election. However, the RLA has spoken out against Corbyn’s plans, saying that they would deter many landlords from investing in the buy-to-let sector, which would reduce the supply of homes to let.

Last week, Corbyn announced ten pledges in his bid to become the prime minister, but the RLA believes his plans would worsen the UK’s housing crisis.

The Chairman of the RLA, Alan Ward, explains: “Jeremy Corbyn’s call for rent controls would be a disaster for tenants. He is ignoring all history and experience, which shows that where such controls are applied, they choke off the supply of homes to rent, making it more difficult for tenants to access decent and affordable housing. This has previously been acknowledged by Labour’s former minister responsible for housing in Wales.

“Rather than playing the populist tune, Mr. Corbyn would do well to consider the facts. Figures in the English Housing Survey show that private sector tenants are spending an average of four years in their current property, up from 3.7 five years ago. Such tenants are also more satisfied with their accommodation than those in the social rented sector, according to the same survey.”

The RLA has long opposed the introduction of rent controls, insisting that the Government should address the issue of housing supply by encouraging greater levels of housebuilding in order to stabilise rents in the long-term, rather than penalising landlords.

The RLA’s objection to Corbyn’s plans arrives as the Society of Licensed Conveyancers calls for the Government to scrap Stamp Duty.

The group believes that abolishing Stamp Duty, particularly the 3% surcharge for landlords, would create a more “buoyant and vibrant” property market.

Do you agree with these recent calls?

Huge Jump in London Rents Prompts Calls for Rent Controls

Published On: June 8, 2016 at 11:16 am

Author: Em Morley

Categories: Property News

Tags: housing crisis,London,London rents,rent controls,rent prices

A huge jump in London rents has prompted calls for rent controls and security of tenure by leading trade union GMB.

After recording a rent price rise of over 50% in one London borough, GMB called for New York-style rent controls and security of tenure for private tenants in the capital.

The GMB Congress in Bournemouth was told how families with children should face greater security in their rental properties, through rent caps and a crash programme for new social housing.

Huge Jump in London Rents Prompts Calls for Rent Controls

The study highlights the change in rents in the capital for one, two and three-bedroom properties between 2011-16. It found that the average cost of a one-bed home in Hounslow surged by 51.3% in the last five years – the highest increase in London.

In 2011, the average rent price in Hounslow for a one-bed property was £825 per month. It is now £1,248 – a rise of £423 a month.

The research found that in 11 London boroughs, rents have increased by 30% or more during the past five years.

For the capital as a whole, average rents for one-bed properties grew from £950 per month in 2011 to £1,250 in 2016 – up by £300 or 31.6%.

This huge leap in London rents compares to a Retail Price Index increase of 12.3% over the same period. It also compares to the average rent for a one-bed home in England in 2011 of £495 per month, which rose by £55 to £550 in 2016 – an increase of 11.1%.

Over the same period, the average rent for a two-bed property in London grew from £1,192 to £1,500 per month – up by £308 or 25.9%.

The average rent on a three-bed in the capital rose from £1,350 to £1,800 a month – up by £450 or 33.3%.

The Senior Officer at GMB, Warren Kenny, comments: “These figures show that the housing crisis in London is getting worse, as rents soar under a Tory Government. Rents in one borough for basic accommodation soared by over 50% at a time when wages are frozen or being cut.

“These soaring rents coincide with the explosion in the size of the private rented sector and the growth in the billions of taxpayers’ money paid in housing benefits to private landlords. Nationally, the figure has ballooned from £21.4 billion when Osborne came to power, to £24.3 billion four years later.”

He insists: “London boroughs and the Mayor have to set up a register of landlords to ensure that standards of accommodation are safe and fit for habitation. There is also a need for new legislation on security of tenure especially for families with children at school.

“Rent controls will have to be introduced as well as a crash programme for new social housing if we want to maintain essential services in the capital.”

He concludes: “There is a free-for-all in the London housing market at a time when wages for essential public sector workers are frozen. Some workers in the capital, like cab drivers, even face pay cuts. This position is not sustainable and new thinking is needed to deal with it.”

Mayor of London Receives Support for Rent Controls

Published On: May 12, 2016 at 9:21 am

Author: Em Morley

Categories: Landlord News

Tags: London,Mayor of London,private rental sector,rent caps,rent controls,Sadiq Khan

Sadiq Khan, the new Mayor of London, has received support from property professionals for his campaign to introduce rent controls in the capital.

The average private rent price in London has hit a huge 62% of the typical wage, making housing unaffordable for the average tenant.

Khan is continuing to focus on the capital’s housing crisis, after his mayoral election campaign emphasised the issue that affects many Londoners.

However, Khan’s plans will require the co-operation of central Government to enforce any regulations on the private rental sector.

His measures have been criticised by Shaun Bailey, a Conservative politician elected to the London Assembly, who called them “Soviet-style rent controls”¹.

Mayor of London Receives Support for Rent Controls

Despite this, some property experts have spoken out in support of rent stabilisation measures.

The Head of Residential Research at JLL estate agent, Adam Challis, explains: “This is being described as rent control, but it is more properly described as rent indexing, and, set at the right level, it is completely palatable to investors. It offers a sense of relative certainty over what future rental growth is going to be.”

Richard Donnell, the Director of Research at Hometrack, believes large-scale landlords will accept a measure of control on rents – a finding reflected by a University of Cambridge study for the London Assembly last year.

These measures are often accompanied by longer tenancies, which was included in Zac Goldsmith’s – Khan’s main rival – mayoral manifesto.

However, Lucian Cook, the Director of Residential Research at Savills estate agent, claims: “Anything that involves capping rents may be a double-edged sword.”¹ He insists that the fundamental problem lies in the shortage of supply of new homes.

More politically achievable is a London living rent, which Khan says would take the form of rents capped at one-third of the local average income, rather than market rents.

Challis claims this could replace existing affordable rents, which are often required within new developments under planning agreements. Part of Khan’s housing plan is to insist that 50% of all new home developments are affordable.

In the private rental sector, affordable rents can currently cost up to 80% of market rates.

Challis believes: “To implement this on new properties would be relatively easy – it’s already what we do in various forms within the affordable housing spectrum. That’s something that would probably be supported by the local population and by local authorities.”¹

Julian Goddard, a partner at property advisers Daniel Watney, thinks there are more serious issues to look at: “My recommendation would be to look at the supply side and take measures to ease the viability of new schemes.”¹

The Policy Manager at Generation Rent, Dan Wilson Craw, insists that rents linked to wages should be introduced across the market: “The living rent seems to be spooking a lot of landlords, but it is not big enough for them to worry about – we would like it to be far more widespread.”¹

Yesterday, we reported on Khan’s plans to release a new list of rogue landlords. The database would ensure that tenants could check whether a landlord has committed any housing offences.

Do you believe that Khan’s plans will benefit all in London’s private rental sector?

¹https://next.ft.com/content/f432c7aa-16bd-11e6-b197-a4af20d5575e

Scotland to Enforce Rent Controls Under New Bill

Published On: March 21, 2016 at 9:29 am

Author: Em Morley

Categories: Landlord News

Tags: letting agents,no fault evictions,rent controls,Scotland

Last week, the Scottish Parliament passed a bill to end the no fault ground for eviction and to enforce rent controls across the private rental sector.

Scotland to Enforce Rent Controls Under New Bill

The Private Housing (Tenancies) (Scotland) Bill will implement a rule that means that landlords and letting agents will no longer be able to ask a tenant to leave a rental property, simply because the tenancy has come to an end. Instead, tenancies will roll on automatically.

The new law will also allow the introduction of rent controls by local councils in areas where rent rises are considered excessive.

The Director of housing charity Shelter Scotland, Graeme Brown, believes that private tenants, landlords and letting agents in Scotland will benefit from the new legislation.

He states: “This bill represents the biggest move forward in private tenancy law in the last quarter of a century, and we welcome many of the changes it contains.

“It will significantly rebalance the relationship between tenants and landlords, and modernise and strengthen the rights of the growing number of private rented sector tenants in Scotland.

“The abolition of no fault eviction, combined with a flexible and secure tenancy, will help families in particular put down roots in their communities and help people to stay in their home for as long as they need.”¹

The Scottish Housing Minister, Margaret Burgess, adds: “These significant changes will transform the private rented sector, creating a more modern tenancy, bringing stability to the sector and helping to meet Scotland’s housing needs.”¹

Landlords and letting agents in Scotland have previously tried to challenge the new law.

Are you a landlord or agent in Scotland? What do you think about the changes?

¹http://www.propertyindustryeye.com/scottish-government-passes-bill-bring-rent-controls/