MSE News: Tenants forced to use payday loans to beat rent hikes

edited 14 March 2013 at 11:42AM in House Buying, Renting & Selling
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  • zerogzerog Forumite
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    lissliss wrote: »
    You're absolutely spot on. Affordable housing is a human right. Bring back rent controls!

    Not sure if being sarcastic. In case not: rent is set at what people are willing to pay. If you can't afford your rent then someone else can, otherwise the property will be empty and the landlord will reduce the rent. If one landlord doesn't reduce the rent then others will, and their properties will get rented out.

    Shelter may be a human right, but living in London (or the town centre of a smaller town) is not.
  • jimjamesjimjames Forumite
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    lissliss wrote: »
    You're absolutely spot on. Affordable housing is a human right. Bring back rent controls!

    As per previous post, if this is serious then we can look forward to a severe lack of private rented housing. Why would anyone want to rent their house if they weren't getting a return. We'll end up with few houses being chased by large numbers of tenants and only those with the best prospects and credit rating will be able to rent.

    Just because insurance is available for certain situations doesn't mean it applies in every circumstance. Rent guarantee is possible but generally only for tenants that are most likely to be able to pay their rent - even insurance companies aren't that daft!

    Sadly this headline seems to be another example of MSE turning out Daily Mail style headlines that bear no relation to reality.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Percy1983Percy1983 Forumite
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    jimjames wrote: »
    As per previous post, if this is serious then we can look forward to a severe lack of private rented housing. Why would anyone want to rent their house if they weren't getting a return. We'll end up with few houses being chased by large numbers of tenants and only those with the best prospects and credit rating will be able to rent.

    But if landlords started selling prices would drop less would need to rent.

    The problem is there is a shortage of housing, there needs to be more building.

    The problem is private landlords shouldn't be aloud to exploit this, yes I agree that if one person can't pay it another probably can, but as all landlords are putting prices up where are people meant to go.

    With rent caps, the poorer people will be able to afford to live and the ones who could afford a rent rise will have a little more money to spend in the economy.

    The argument of somebody else can afford it is well and good to feed greed, but what about those left behind?
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  • Percy1983 wrote: »
    But if landlords started selling prices would drop less would need to rent.

    Nope.

    If landlords start selling you decrease the supply of rented houses and increase the supply of owner occupied houses.

    But you also decrease the number of renters, and increase the number of buyers.

    In fact, you force an equal number of renters out of the rental market and into the owner market. Supply and demand for both rental and owned houses remains in exactly the same equilibrium as today.

    Which is therefore completely neutral for both rents and prices.
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  • Percy1983Percy1983 Forumite
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    Nope.

    If landlords start selling you decrease the supply of rented houses and increase the supply of owner occupied houses.

    But you also decrease the number of renters, and increase the number of buyers.

    In fact, you force an equal number of renters out of the rental market and into the owner market. Supply and demand for both rental and owned houses remains in exactly the same equilibrium as today.

    Which is therefore completely neutral for both rents and prices.

    More or less the balance remains as you say, just less feeding the greed of landlords and more getting a house for themselves.

    Will be good for many FTBs wouldn't it. ;)
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  • blckbrdblckbrd Forumite
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    The politics of Right to Buy and other forms of disposal has a lot to answer for.

    Some councils auction off voids that the believe will be too costly to repair. These properties tend to be conversions. A condition of sale is that the buyer doesn't live in the property and one such (that blew my mind frankly) was rented for £3k per month.

    Of course private landlords are entitled to make a profit. It's just that when it's at the expense of social housing, there's a problem that needs fixing.

    Payday loans, the Provident, the 'tally man' - these types of 'legitimate' lenders have existed for donkeys years alongside loan sharks and thugs. Just the pool of desperate customers seems to be getting bigger.
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  • lisslisslissliss Forumite
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    zerog wrote: »
    Not sure if being sarcastic. In case not: rent is set at what people are willing to pay. If you can't afford your rent then someone else can, otherwise the property will be empty and the landlord will reduce the rent. If one landlord doesn't reduce the rent then others will, and their properties will get rented out.

    Shelter may be a human right, but living in London (or the town centre of a smaller town) is not.

    Of course living in London is not a human right, but many (working) people I know who live in London are spending at least 40 per cent of their income on rent to live in accommodation of a just about tolerable quality and as a result are struggling.

    Of course you could move say from zone 3 to zone 6 for cheaper rent, but you would then see your travel costs rise unsustainably.

    What should these people do? Quit their jobs and leave the city? Sign on as unemployed somewhere else?

    Unfortunately our economy is so London-centric that many people, especially young professionals, need to live there because there's simply very little suitable employment for them elsewhere.

    So of course there's a huge demand for private rented accommodation in places like London and people will pay grotesquely inflated rents for very basic accommodation, but it's because for many it's a choice between either working a good job there and paying for accommodation through the nose, or leaving the city and either being unemployed or working a menial job or one that they're overqualified for somewhere else.
  • ThrugelmirThrugelmir Forumite
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    Payday loans, particularly those that charge 1000%'s APR (most do..)

    Why don't LL's reduce their rents?

    Ah yes. They have operating expenses to cover and as a business are out to make a profit.

    However both LL's and Payday loan companies do have something in common. A lack of proper regulation and supervision. Though Payday companies do appear to have been tackled.
  • worried_jimworried_jim
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    MSE_Helen wrote: »
    "Shelter says renters are resorting to payday loans and dipping into their children's savings to hang onto their homes..."



    If they only got rid of Sky, Iphone and 20 Mayfair lights a day they could afford it no problems.
  • edited 15 March 2013 at 7:39PM
    Takeaway_AddictTakeaway_Addict Forumite
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    edited 15 March 2013 at 7:39PM
    Percy1983 wrote: »
    I do believe there is insurance they can take out for such things.

    The problem is running a business in an immoral way is fine with items don't need (ie the margin on an iPhone), but when it involves something as basic as shelter which everybody needs they shouldn't be allowed to just keep milking it.

    Quite but then this is another cost passed onto the tenant.

    Its not the private landlords that are the issue, its the lack of non private housing.

    Supply and demand, supply is low and demand is high
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