If it cuts the amount of housing benefit paid to private landlords it can only be a good thing for the countries finances and I can't see anyone objecting to that
If the overall figures are higher than the ones below, that will be increase in the upper end of rents and not the more affordable ones.
Built a spreadsheet using the LHA rates provided by the Valuation Office Agency which use actual private rental rates for their figures. Had to remove Central London as the drop was so large it obviously had more to do with the benefits caps.
Comparing 30% percentile June 2010 to May 2014
1 room(eg bedsit)
Average 6.67% increase
min 11.55% drop Inner SW London
max 48.82% increase Mendip
1 bedroom average 4.38% increase
min 6.41% drop E Staffordshire
max 21.33% increase Inner E London
2 bedroom average 5.2% increase
min 0.95% drop N Cumbria
max 23.4% increase Outer SW London
3 bedroom average 5.42% increase
min 5.15% drop
max 22.76% increase
4 bedroom average 5.75% increase
min 13.62% drop
max 26.21% increase
First it looks like Milliband is returning at least in part to old Labour. With increased regulations and the like
Second. Like all such proposals the devil is in the detail. How is it going to handle differing levels of house price increases, interest rate changes and even where some parts of the country increase, while others decrease or increase at differing rates.
Alongside Rent Controls what about keeping property in good condition, boilers working. If the Controlled rents are too low it might act as a disincentive to handle these issues. Too high and you defeat the object of having them in the first place.
When we had rent controls and secure tenancies by law the shortage of accomadation to rent was nowhere near where it is now.
I do believe that in Germany they are set to the local rate.
So in Knightsbridge it would be set at the Knightsbridge rate and in Wigan at the Wigan rate. I would imagine the cap would work by setting a maximum increase that can be levied - ie 1%.
When we had rent controls (Mrs T abolished them in the late eighties) rents were set locally. The rents of each area were gathered, extremely low and high omitted, and the regulated rent for each type of property would be determined. Housing benefit would not be paid above that level.
Price controls really are one of the world's worst ideas...how many times does it need to be tried before politicians finally realise that it causes more problems than it solves.
And it will be the tenants who will be hit.
When this 'all-knowing' committee sets the annual rise, two things will happen:
1) Landlords will read 'maximum rise' as 'government approved rise' - any landlord who otherwise would not have put up their rents by that number absolutely will do now;
2) If the cap falls below what the landlord needs to maintain his investment in the property and get a decent yield (5-6% of so), then they're not going to renew rental contracts. They will pull out - what was a home for rent will now be a 2-week-a-year holiday home for a Chinese or Middle Eastern investor - so we'll see housing shortages at that end of the market - i.e. pretty much all of London.
So, higher rents at rents at the low end, and a shortage of properties at the top end. And, of course, every landlord, especially in London, will err on the side of caution, jacking up their rents just before this comes into force.
Either Ed is a complete numbskull, or he really hates tenants.
regards,
Cypher
That's just theory. In practice, when we had rent regulation the scenario you describe didn't happen, in fact the problem of rising rents and shortage of housing probably hasn't been as bad as it is now since the forties. The proof of the pudding is in the eating.
That's just theory. In practice, when we had rent regulation the scenario you describe didn't happen, in fact the problem of rising rents and shortage of housing probably hasn't been as bad as it is now since the forties. The proof of the pudding is in the eating.
Until we build on green belt or change the planning laws to stop listening to locals, we will have this problem. The horse bolted a long time ago.
The tenant only has to give one months notice whereas the landlord has to provide a three year tenancy after the six months probationary period I.e. If the tenant pays their rent.
However there are loads of get out clauses in the scheme e.g. if a landlord wants to sell the place or claims they need it for their family. So it's next to worthless - sorry we need the flat for my nephew or first cousin twice removed to live in so bye bye. In the real world dodgy landlords will find a way round the rules.
Still it's well intentioned - as socialists always are!:D
Thanks for the clarification.
So in other words it tries to lock a house owner who is renting out a property into a situation of not being able to sell her own property of a timing of her own choosing and in anticipation of any Government created house price crash.
It is basically a recipe for ensuring that when any Government starts to ruin the economy, people are completely helpless in minimising what could be a significant financial threat to themselves and turn them in some instances from very small scale business people - ie one property rented out - into a further group reliant on state benefits.
I don't think this will ever happen, as pointed out on the BBC news website 12.5% of Labour MPs are private landlords and I can't see Labour's majority if they get one being very big so they won't have the votes to carry it through.
The Conservative party are on the side of the minority of landlords charging exorbitant rents and against the vast majority of renters who are forced to pay them.
I'd have thought the housing benefit cap would stop those rogue landlords in their tracks, plus I'm not sure how figure the minority of landlords can have the "vast majority" of tenants either but I suppose vacuous statements are par for the course with your posts.
Labour have admitted that BTL landlords will have to be exempt, as mortgage terms that stipulate 6-12 month maximum contracts cannot be overridden.
So what difference is it going to make? Landlords who don't have mortgage restrictions have always been able to agree any length of contract they want beyond 6 months.
Until we build on green belt or change the planning laws to stop listening to locals, we will have this problem. The horse bolted a long time ago.
It's probably not widely known but in Surrey more land is given over to golf courses than to housing. So let's start with the golf courses - cos we really don't need that many!:D
A quarter of Tory MPs will REALLY hate this as they are landlords themselves, its a good policy, fair play to Labour as it completely goes against the Tory model of private renting.
Is it? - Labours own housing minister has already said it wont work
What i find funny is the same people in general who say this is a bad idea, are the same people moaning about the high housing benefit bill or the high welfare bill, yet the high cost of rents has a big effect on the benefit bill so the 2 things go hand in hand together
So in this Grand scheme of things.
If a load of landlords see a housing market booming and the prospect of restrictions
they are just going to evict people and sell the houses.
So what difference is it going to make? Landlords who don't have mortgage restrictions have always been able to agree any length of contract they want beyond 6 months.
Around 1.6 million rental properties are on a BTL mortgage - out of 2.4 million available.
This means nearly 70% of rental properties will be exempt from the rules. The rest of them will just be encouraged to re-mortgage a small proportion of the property to exempt themselves too.
Also, there is a world of difference between individuals/companies with hundreds of rental properties and the person with one extra property to rent out. At the very least a distinction needs to be made there on the length of tenancy. Three years is too long for a private individual with one extra property. He has less financial means of removing bad tenants. It may even be his sole income and the difference between being on benefits or not.
Conversely, in the former case, there would ordinarily be pots of money available to evict tenants via the courts and it is likely to have few, if any, negative implications for the state benefits bill. So the rich owners of streets of houses will be affected far less than the individual with, say, just one extra studio flat. That's ridiculous. And, of course, whether housing costs rise overall with reduced supply is another very big matter of concern as others have said.
Around 1.6 million rental properties are on a BTL mortgage - out of 2.4 million available.
This means nearly 70% of rental properties will be exempt from the rules. The rest of them will just be encouraged to re-mortgage a small proportion of the property to exempt themselves too.
You might think as the government bankrolls the banks and provides their liquidity at ultra low rates they could just regulate to stop this. Buy to let mortgages are totally unregulated whereas for first time buyers etc the rules are not very restrictive. Time to rebalance in favour of owner occupiers methinks?
Around 1.6 million rental properties are on a BTL mortgage - out of 2.4 million available.
This means nearly 70% of rental properties will be exempt from the rules. The rest of them will just be encouraged to re-mortgage a small proportion of the property to exempt themselves too.
Blindingly obvious to one and all apart from Miliband
So in this Grand scheme of things.
If a load of landlords see a housing market booming and the prospect of restrictions
they are just going to evict people and sell the houses.
That has always happened - and it has happened to me before as a tenant. You can't legislate to stop someone selling something that they own.
What i find funny is the same people in general who say this is a bad idea, are the same people moaning about the high housing benefit bill or the high welfare bill, yet the high cost of rents has a big effect on the benefit bill so the 2 things go hand in hand together
And you solve both problems by building more not crackpot schemes to try and control the market.
And you solve both problems by building more not crackpot schemes to try and control the market.
How crack pot an idea is it if rent control used to work in the UK and rent control is used in many other nations. How is rent control not a tried and tested and workable thing.
That has always happened - and it has happened to me before as a tenant. You can't legislate to stop someone selling something that they own.
How does that work then?
Surely if you rent a place out for a three year term and then you lose your job and have to sell you are breaking the new Miliband law?
I am trying to understand it and failing.
Wouldn't that mean people who have suddenly been made unemployed and forced into a sale having to pay tenants a lot of money in compensation that they can't afford?
What if you are in the North and suddenly have to sell to move South because of unexpected family illness? Is compensation payable then too?
And you solve both problems by building more not crackpot schemes to try and control the market.
But has been proved by the lack of building, the building of homes is not based on need but is based on how much profit can be made. The proof of need of mass buiding programme is needed, but that would drive prices down, so to protect prices we have a little trickle of housing building not enough to feed demand. As we have a stupid idea that to show the country is doing well house prices must be high any drop in house prices is seen as a bad thing, which is why we have a housing mess.
Comments
If the overall figures are higher than the ones below, that will be increase in the upper end of rents and not the more affordable ones.
Built a spreadsheet using the LHA rates provided by the Valuation Office Agency which use actual private rental rates for their figures. Had to remove Central London as the drop was so large it obviously had more to do with the benefits caps.
Comparing 30% percentile June 2010 to May 2014
1 room(eg bedsit)
Average 6.67% increase
min 11.55% drop Inner SW London
max 48.82% increase Mendip
1 bedroom average 4.38% increase
min 6.41% drop E Staffordshire
max 21.33% increase Inner E London
2 bedroom average 5.2% increase
min 0.95% drop N Cumbria
max 23.4% increase Outer SW London
3 bedroom average 5.42% increase
min 5.15% drop
max 22.76% increase
4 bedroom average 5.75% increase
min 13.62% drop
max 26.21% increase
When we had rent controls and secure tenancies by law the shortage of accomadation to rent was nowhere near where it is now.
When we had rent controls (Mrs T abolished them in the late eighties) rents were set locally. The rents of each area were gathered, extremely low and high omitted, and the regulated rent for each type of property would be determined. Housing benefit would not be paid above that level.
That's just theory. In practice, when we had rent regulation the scenario you describe didn't happen, in fact the problem of rising rents and shortage of housing probably hasn't been as bad as it is now since the forties. The proof of the pudding is in the eating.
Until we build on green belt or change the planning laws to stop listening to locals, we will have this problem. The horse bolted a long time ago.
Thanks for the clarification.
So in other words it tries to lock a house owner who is renting out a property into a situation of not being able to sell her own property of a timing of her own choosing and in anticipation of any Government created house price crash.
It is basically a recipe for ensuring that when any Government starts to ruin the economy, people are completely helpless in minimising what could be a significant financial threat to themselves and turn them in some instances from very small scale business people - ie one property rented out - into a further group reliant on state benefits.
And there you have it...
Labour have admitted that BTL landlords will have to be exempt, as mortgage terms that stipulate 6-12 month maximum contracts cannot be overridden.
I'd have thought the housing benefit cap would stop those rogue landlords in their tracks, plus I'm not sure how figure the minority of landlords can have the "vast majority" of tenants either but I suppose vacuous statements are par for the course with your posts.
So what difference is it going to make? Landlords who don't have mortgage restrictions have always been able to agree any length of contract they want beyond 6 months.
It's probably not widely known but in Surrey more land is given over to golf courses than to housing. So let's start with the golf courses - cos we really don't need that many!:D
Is it? - Labours own housing minister has already said it wont work
If a load of landlords see a housing market booming and the prospect of restrictions
they are just going to evict people and sell the houses.
Around 1.6 million rental properties are on a BTL mortgage - out of 2.4 million available.
This means nearly 70% of rental properties will be exempt from the rules. The rest of them will just be encouraged to re-mortgage a small proportion of the property to exempt themselves too.
Conversely, in the former case, there would ordinarily be pots of money available to evict tenants via the courts and it is likely to have few, if any, negative implications for the state benefits bill. So the rich owners of streets of houses will be affected far less than the individual with, say, just one extra studio flat. That's ridiculous. And, of course, whether housing costs rise overall with reduced supply is another very big matter of concern as others have said.
You might think as the government bankrolls the banks and provides their liquidity at ultra low rates they could just regulate to stop this. Buy to let mortgages are totally unregulated whereas for first time buyers etc the rules are not very restrictive. Time to rebalance in favour of owner occupiers methinks?
Blindingly obvious to one and all apart from Miliband
That has always happened - and it has happened to me before as a tenant. You can't legislate to stop someone selling something that they own.
And you solve both problems by building more not crackpot schemes to try and control the market.
How does that work then?
Surely if you rent a place out for a three year term and then you lose your job and have to sell you are breaking the new Miliband law?
I am trying to understand it and failing.
Wouldn't that mean people who have suddenly been made unemployed and forced into a sale having to pay tenants a lot of money in compensation that they can't afford?
What if you are in the North and suddenly have to sell to move South because of unexpected family illness? Is compensation payable then too?
But has been proved by the lack of building, the building of homes is not based on need but is based on how much profit can be made. The proof of need of mass buiding programme is needed, but that would drive prices down, so to protect prices we have a little trickle of housing building not enough to feed demand. As we have a stupid idea that to show the country is doing well house prices must be high any drop in house prices is seen as a bad thing, which is why we have a housing mess.