Posts with tag: rent controls

Rent Controls to be Introduced in Ireland This Month

Published On: November 9, 2015 at 9:44 am

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Rent Controls to be Introduced in Ireland This Month

Rent Controls to be Introduced in Ireland This Month

Ireland is set to introduce rent controls this month, with the measure due to be agreed by the Irish cabinet tomorrow.

Under the new rules, landlords will only be allowed to increase rent prices every two years. The Minister for Finance, Michael Noonan, says that the new laws will be rushed through to stop landlords pushing up rents on vulnerable tenants.

The Environment Minister, Alan Kelly, confirms that the measure will be implemented quickly, “certainly”1 this month.

It is alleged that some landlords are increasing rent prices now before they are stopped by the new regulations. However, Noonan insists that other laws protect renters.

He says: “Alan Kelly will be able to do these things under law… He will be able to make legal arrangements to prevent [that practice] happening.”2

The Private Residential Tenancies Board clarifies that rents cannot be increased within 12 months of a tenancy starting or within 12 months of the last rise.

It also says that it is illegal for landlords to ask for more than the market rent, which is the figure that a tenant would be willing to pay on a similar property in the same area.

The new rent controls are part of a set of measures designed to boost the supply of homes, as a severe lack of housing is becoming a serious issue.

Rent prices in Dublin have been rising by 10% per year and are almost back to the levels recorded at the peak of Ireland’s property boom a decade ago, which came before a huge bust.

1 http://www.propertyindustryeye.com/ireland-to-introduce-rent-controls-this-month/

2 http://www.breakingnews.ie/ireland/michael-noonan-new-laws-can-prevent-rent-hikes-before-rent-controls-come-in-704397.html

New Welsh bill to amend tenancy contracts

Published On: October 23, 2015 at 10:10 am

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A new bill currently working its way through the Welsh Assembly could dramatically change the way tenancy contracts are written, but will still give letting agents the right to charge fees to their tenants.

The Residential Landlords Association says that it has been working closely with the Welsh Government on the terms of the Renting Homes Bill.

Controls

Proposals to remove landlords’ no-fault Section 21 eviction notice powers and to include rent controls within the bill have been disregarded, the association claims.

In addition, the RLA says it has secured concessions, such as a new abandonment process, meaning landlords will not require a court order should they believe a property has been left empty.

New Welsh bill to amend tenancy

New Welsh bill to amend tenancy

A statement from the RLA says, ‘we have also maintained the ability for letting agents to charge fees to tenants which means that, at least in practice, agents should not have to pass this cost onto the landlord.’[1]

Despite its positivity, the RLA says that it still has concerns over whether the bill, if passed, will contain a six month moratorium, which would protect tenants from eviction during the opening six months of their tenancy.

[1] https://www.landlordtoday.co.uk/breaking-news/2015/10/welsh-bill-changes-tenancy-contracts-but-leaves-letting-agents-fees-unchanged

 

 

Most London Landlords Would Sell if a Rent Freeze was Introduced

Published On: October 9, 2015 at 4:03 pm

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The majority of landlords in London (60%) would sell one or more of their properties if a rent freeze was introduced, according to a new report.

The research was commissioned by the London Assembly Housing Committee and conducted by the Cambridge Centre for Housing & Planning Research (CCHPR).

The CCHPR surveyed around 200 landlords, most of whom do not own many properties, and commercial built-to-rent investors.

Most London Landlords Would Sell if a Rent Freeze was Introduced

Most London Landlords Would Sell if a Rent Freeze was Introduced

CCHPR presented the landlords with six potential scenarios of rent stabilisation, for example, a one-off rent freeze for three years or linking rent rises to wage increases.

The study revealed that the majority of landlords would continue as they are doing if rents could only be increased in line with inflation, however, 40% stated that they would sell some or all of their properties if this was introduced.

Additionally, most landlords said they were not keen to offer longer tenancies, but 52% would be more inclined to do so if tax incentives were available.

Chair of the London Assembly Housing Committee, Tom Copley, addresses the sector: “Much has been said from all sides about rent controls, but the debate has been sorely lacking in facts, so it’s incredibly useful to have these set out in this report.

“The choice is not simply between regulating rents and not regulating rents. There is no one size fits all system of rent control, with many cities around the world adopting different models. Each system has upsides and downsides. Our report seeks to find out what could work in London.”

He adds: “We need solutions that work for the millions of Londoners – especially families – in the rental sector. For families, the prospect of having to up sticks with very little notice often means disruption to many aspects of their lives, including schooling and employment.”1

David Smith, the Policy Director for the Residential Landlords Association (RLA), insists that the country will need more homes to rent if it is to solve the housing crisis.

He says: “This report reminds us of the dangers of rent controls, which would in fact reduce supply, thereby increasing rents. Rent controls would also severely reduce standards in rental housing as investment dries up.

“It would take us back to the bad old days of Rachman landlords, which we must prevent for the good of tenants.”1

The report was discussed yesterday (8th October 2015) by various parties, including Alan Benson, the Senior Manager of Housing Strategy at the Greater London Authority, John Bibby, the Policy Officer at Shelter, and Anna Clarke, one of the authors of the report and Senior Research Associate at CCHPR.

1 https://www.landlordtoday.co.uk/breaking-news/2015/10/london-landlords-to-sell-up-in-the-event-of-a-rent-freeze

Shadow Chancellor Calls for Rent Controls, But Are They Needed?

Published On: September 29, 2015 at 4:55 pm

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The new Labour Shadow Chancellor, John McDonnell, has attacked the private rental sector.

During his Labour Party conference speech yesterday, McDonnell spoke of cutting the “billion pound tax breaks given to buy-to-let landlords” and called for controls on “exorbitant”1 rents.

However, new figures reveal that rents have barely hit 2008 levels across many parts of the UK.

Recent data from Belvoir letting agents shows how affected landlords’ rental incomes were during the recession, and how little they have recovered since.

Shadow Chancellor Calls for Rent Controls, But Are They Needed?

Shadow Chancellor Calls for Rent Controls, But Are They Needed?

In 12 counties where Belvoir has had offices since the beginning of the recession, average rents are still below 2008 levels.

Analysis of these branches shows that average rents in the second quarter (Q2) of this year surpassed the record high of Q3 2008 by just £6 per month.

Additionally, the 2008 peak was not hit again until Q4 2014.

The lowest rents in the past seven years were recorded in Q3 2009, at an average of £670 a month.

In Q1 2015, rent prices reached £710, but dropped to £708 in Q2.

For all Belvoir offices, including new ones, the average monthly rent for the second quarter of this year was £756.

In London, the story is completely different, with rents standing much higher than in 2008.

In 2008, the average monthly rent in the capital was just under £1,200. Although they fell slightly the following year, by Q4 2009, they had surpassed 2008 levels.

London rents continued to increase irregularly, hitting a new peak of around £1,700 per month in Q1 2012.

In Q2 this year, they dropped again, to an average of £1,460.

Dorian Gonsalves, Director of Commercial and Franchising at Belvoir, comments on the data: “The Belvoir quarterly rental index, which is prepared by property analyst Kate Faulkner, has picked up rises in rents in most places across the country since Q4 2014, but contrary to media reports, these are far from extortionate or spiralling out of control.

“Belvoir’s data shows that in 12 counties where Belvoir has been trading for the last seven years, Q2 2015 average rents have still to recover to the highs of 2008. These include Cheshire, Dorset and Northamptonshire.

“In contrast, inflation has risen by 19.17%.”

He continues: “The number of Belvoir counties that exceeded the 2008 rental highs during Q2 2015 was 19, and these include Bedfordshire, Worcestershire and Wiltshire.

“Unsurprisingly, the highest increase over this time was in London, where rents have increased by 22% since 2008, in line with inflation.

“However, in the East Midlands, rents are still 2.5% lower than they were in 2008.”1

1 http://www.propertyindustryeye.com/labour-shadow-chancellor-lays-into-private-rented-sector-and-calls-for-rent-controls/

 

 

Scotland to bring in tighter rent controls

Published On: September 3, 2015 at 4:24 pm

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In a reshuffle to the country’s private rented sector, Scotland is to introduce stricter rent controls and ban, ‘no fault’ evictions.

First Minister Nicola Sturgeon recently released the Scottish National Party’s latest programme for Government for the upcoming year.

Changes

The programme includes a Private Tenancies Bill, which has measures that promise to, ‘provide more predictable rents and protection for tenants against excessive rent increases, including the ability to introduce rent controls for rent pressure areas.’[1]

In addition, the changes will see the removal of the, ‘no-fault ground for repossession, meaning a landlord can no longer ask a tenant to leave simply because the fixed-term has ended.’[1]

However, the Scottish Property Federation says that rent controls could deter investment within Scotland’s private rented sector, alongside being detrimental to housing supply.

What’s more, the SPF is worried that rent controls could see future investment in the build to rent market wiped out. The organisation believes that build to rent has potential to substantially boost Scotland’s housing stock.

Scotland to bring in tighter rent controls

Scotland to bring in tighter rent controls

Considerations

David Melhuish, director of the Scottish Property Federation commented, ‘we will consider the detail of the Bill carefully when it is published but we have been trying to encourage investment into Scotland’s purpose-built rental market for a long time, and it has been great to see momentum build over the past few months with some big deals taking place.’[1]

‘A clear message we have had from the industry, however, is that the mere prospect of rent controls, could be enough to spook potential investors bring us back to square one again,’ Melhuish continued.[1]

Concluding, Mr Melhuish said, ‘f the Scottish Government wants to increase housing supply, then the introduction of rent controls is not the way to do it. The purpose-built private rented sector has the potential to deliver a large amount of new homes across Scotland, and we should be doing everything we can to encourage investment in this sector rather than regulate this sector before it has had chance to take root.’ [1]

 

[1] https://www.landlordtoday.co.uk/breaking-news/2015/9/scotland-to-introduce-rent-controls

 

 

Tenants Waiting 10-20 Years for a Flat, is this the Reality of Rent Controls?

Published On: August 19, 2015 at 5:58 pm

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It seems unbelievable that a prospective tenant could walk into a letting agent to enquire about rental properties, to be told that they must register now, but wait between 10-20 years for a home.

Are there cities where most agents have no properties to offer? Places where property groups decide the rent price? Shockingly, this exists within Europe.

Stockholm is believed to be the world capital of rent controls. So it is as bad as it sounds?

One blogger seems to think so, with this post documenting the situation in Sweden: http://marginalrevolution.com/marginalrevolution/2015/07/rent-control.html

Tenants Waiting 10-20 Years for a Flat, is this the Reality of Rent Controls?

Tenants Waiting 10-20 Years for a Flat, is this the Reality of Rent Controls?

Our recent article about tenant group Generation Rent being granted a fund to fight for rent controls now doesn’t seem so appealing. Read more here: /generation-rent-is-given-45000-to-fight-for-rent-controls/

Allegedly, waiting time in Stockholm for an inner city apartment is 10-20 years and around 7-8 years in the suburbs.

The official housing queue is managed by the city council, which awards hopeful tenants one point for every day they wait. To receive a home, they need the most points and money for the rent.

When a flat in inner Stockholm recently became available, 2,000 people applied for it. The person who got the apartment had been waiting since 1989.

The blog states: “Rent control creates many more problems than it solves.”

And an Australian man, who went to live and work in Sweden last year, has reiterated the issue.

Dr Peter Vella claims: “Sweden is well known for ABBA and IKEA, but it should be more widely known as the land of rent control.”

Every year, the Swedish Property Federation and the Swedish Tenants Association join to set the rents. The unnaturally low prices fuel high demand, but weaken financial incentives for developers to build.

Rent controls make it difficult to find a vacant property, as people do not want to leave their current home due to the worry of joining the queue yet again.

Vella explains: “Walking around Stockholm, one notices the complete lack of real estate agencies advertising vacant rental housing.

“Where do Stockholmers go to rent apartments? The answer is Stockholm City Council’s housing service. Incredibly, 430,000+ people are registered as waiting.”

To try and meet housing demand, it is legal in Sweden for tenants to sub-let, something that Chancellor George Osborne is trying to introduce in the UK.

Also, there is a separate queue for insecure, short-term lets.

Vella concludes: “With rent controls, be careful what you wish for, you might just get it.”1 

Vella fears Sydney, Australia will introduce rent controls.

As London could be subject to the same fate, are they such a good idea?

1 http://blogs.crikey.com.au/theurbanist/2015/02/19/swedish-rent-control-experience-a-warning-for-sydney/