Milliband promises rent controls

antrobus

jamesd wrote: »

....What it is in general is an attack on tenants of reasonable landlords, who face the prospect of automatic rent increases written into their tenancy contracts ....

That would be one of the consequences.

Capping rent increases to CPI inflation will mean that all rents are linked to CPI, and automatically increased on an annual basis. I imagine that there are a lot of landords who will think that is really not all that bad.

Moby

stator wrote: »

It's about time someone tackled the slumlords in this country. They've been getting away with ripping off the poor for far too long. I don't believe all the apocolypse stories. The world won't implode from rent controls. If it helps put off a few of the have a go BTL landlords then all the better, more houses will move back into the owner occupier sector.

Totally agree. The voices saying it won't work were probably the same individuals saying the minimum wage would destroy jobs!
Hopefully it will have an impact on the buy to leech types.
http://www.thisismoney.co.uk/money/buytolet/article-3053937/Price-private-renting-2-1-regions-record-rises-London-tops-league-biggest-increase-year.html

CLAPTON

Moby wrote: »

Totally agree. The voices saying it won't work were probably the same individuals saying the minimum wage would destroy jobs!
Hopefully it will have an impact on the buy to leech types.
http://www.thisismoney.co.uk/money/buytolet/article-3053937/Price-private-renting-2-1-regions-record-rises-London-tops-league-biggest-increase-year.html

you're certainly right about the minimum wage

just look at the excellent employment rates and conditions of employment in the UK: the envy of the world.

anyway the cap on rents will only adversely affect renters and maybe be a marginal help to a few first time buyers.

Pennywise

padington wrote: »

The only long term solution is however to build.

No, there is an alternative of making better use of the housing stock we already have.

In every High Street, there is ex-residential property now sat empty, either empty shops (most older ones would have once been housing) or empty floors above shops.

On every street, there are 3/4 bedroomed houses occupied by only 1 or 2 people. On every street, there will probably also be a long-term empty houses, sometimes run down, often left empty because the occupier is now in long term care home.

In some cities, there are whole areas of boarded up terraced housing just begging to be renovated and put back into use.

In many picturesque locations, there are holiday/second homes left empty for most of the year, only occupied for a few weeks.

What is needed is some real government action to incentivise all this under-used potential housing stock to be put back into long term residential use. Preferably a mix of higher taxation on under-used properties and grants/incentives for owners to either convert to residential or sell to people will will renovate, and grants/incentives for people to sell and downsize.

CLAPTON

Pennywise wrote: »

No, there is an alternative of making better use of the housing stock we already have.

In every High Street, there is ex-residential property now sat empty, either empty shops (most older ones would have once been housing) or empty floors above shops.

On every street, there are 3/4 bedroomed houses occupied by only 1 or 2 people. On every street, there will probably also be a long-term empty houses, sometimes run down, often left empty because the occupier is now in long term care home.

In some cities, there are whole areas of boarded up terraced housing just begging to be renovated and put back into use.

In many picturesque locations, there are holiday/second homes left empty for most of the year, only occupied for a few weeks.

What is needed is some real government action to incentivise all this under-used potential housing stock to be put back into long term residential use. Preferably a mix of higher taxation on under-used properties and grants/incentives for owners to either convert to residential or sell to people will will renovate, and grants/incentives for people to sell and downsize.

Any party that seriously targets under occupation of the owner occupier homes, is likely to form the opposition for the next 100 years.

Pennywise

CLAPTON wrote: »

Any party that seriously targets under occupation of the owner occupier homes, is likely to form the opposition for the next 100 years.

Which is why I suggested grant/incentives, such as for people downsizing. Turn it around, encourage them to downsize by giving them something, rather than punishing them by increasing tax etc. More carrot rather than stick.

Simple things, like no stamp duty if you buy a house of lower value than the one you're selling. Or a grant towards moving costs when moving to a smaller house. Or subsidy for getting a extra pair of hands for a day or two to help declutter.

I know a fair few people who are rattling around in huge houses they can't afford to upkeep and heat, and who could easily be persuaded to down-size, but they all have their own reasons for staying, for some it's that they can't afford the few thousand it would cost to move, for others, it's just the sheer amount of work they'd have to do to de-clutter etc. Take away these reasons for not moving and you may be pleasantly surprised at how many would bite your hand off with a bit of support.

CLAPTON

Pennywise wrote: »

Which is why I suggested grant/incentives, such as for people downsizing. Turn it around, encourage them to downsize by giving them something, rather than punishing them by increasing tax etc. More carrot rather than stick.

Simple things, like no stamp duty if you buy a house of lower value than the one you're selling. Or a grant towards moving costs when moving to a smaller house. Or subsidy for getting a extra pair of hands for a day or two to help declutter.

I know a fair few people who are rattling around in huge houses they can't afford to upkeep and heat, and who could easily be persuaded to down-size, but they all have their own reasons for staying, for some it's that they can't afford the few thousand it would cost to move, for others, it's just the sheer amount of work they'd have to do to de-clutter etc. Take away these reasons for not moving and you may be pleasantly surprised at how many would bite your hand off with a bit of support.

Curiously, most of the recently retired people I know are busy having extensions built but that's probably another story.

In my view one the the key issues in the UK is that we don't have a housing crisis at all. Basically most of our housing issues are about 'wants' and not 'needs'.
Single young people 'want' a two bed flat so friends can stay; older people still want their large houses so grandchildren can stay or they each want a hobby or study room.

As people have become richer and have more disposable income after essentials like food, clothing etc, there is more to spend on housing (both first and second homes).

So the only way of meeting peoples wants is to build more and/or restrict the population growth.

jamesd

Moby wrote: »

The voices saying it won't work were probably the same individuals saying the minimum wage would destroy jobs!

It'll work far enough to cause CPI rent increase to be built into all tenancy agreements. Probably also cause landlords to kick out tenants more often so they can get the missing rent increases.

My own experience in rent stabilisation in New York is not inspiring. The tenancy agreement banned me from communicating with the board, presumably so I wouldn't learn about the restrictions. Then the landlord repeatedly broke the law with rent increases above the cap level. When I became unemployed and eventually couldn't pay the rent the landlord used fake eviction notices because he'd be unable to get an eviction through the courts, which would notice the illegal rent rises and tell him to refund me the overpayments and that I didn't actually owe him any rent after all.

Given a choice between a tenancy being ended and a higher rent, the tenant is going to choose the higher rent unless there is a ready supply of places to move to at lower cost. Whether it's done illegally or via signing a new three year contract every year. Only more supply can really fix this, reducing the pricing power of landlords, though lower property costs through measures that don't support housing price increases would help by reducing landlord's buying costs and reducing their incentive to sell to make a profit.

Since most studies show that minimum wage reduces employment it's pretty hard to disagree with it. The exceptions tend to be things like studies showing an increase in employment during an economic recovery, like the one since the current government was elected that has taken employment to record highs. The job reductions come from outright job losses to less working people, zero hours contracts and overtime instead of new hires as employers seek to gain flexibility to cover the costs. Doesn't necessarily mean that a minimum wage is bad, it's just not a 100% benefit, it has its side effects that are undesirable as well.

A particularly interesting study was the one in the US, where states could choose when to implement a change. The sooner they did the change, the sooner they saw a reduction in employment. The end result was an estimated 0.7% increase in the unemployment percentage once all of the changes had been implemented.

Union reps can usually be relied on to claim that minimum wage is all good because they represent the people in jobs, not the ones who aren't working. Employers in fast food and low skilled labour industries the opposite because most of their employees are on or close to minimum wage. Politicians get to pick between more for the people in jobs but less of them or more in jobs but lower pay. In this country Labour has lots of union funding and seems to prefer helping the ones in jobs.

ukcarper

Pennywise wrote: »

Which is why I suggested grant/incentives, such as for people downsizing. Turn it around, encourage them to downsize by giving them something, rather than punishing them by increasing tax etc. More carrot rather than stick.

Simple things, like no stamp duty if you buy a house of lower value than the one you're selling. Or a grant towards moving costs when moving to a smaller house. Or subsidy for getting a extra pair of hands for a day or two to help declutter.

I know a fair few people who are rattling around in huge houses they can't afford to upkeep and heat, and who could easily be persuaded to down-size, but they all have their own reasons for staying, for some it's that they can't afford the few thousand it would cost to move, for others, it's just the sheer amount of work they'd have to do to de-clutter etc. Take away these reasons for not moving and you may be pleasantly surprised at how many would bite your hand off with a bit of support.

The problem is a lack of suitable property to downsize to most developers seem to think older people want to live in blocks of retirement flats with high overheads. Which I any many others do not want to move into and small bungalows etc are not only in short supply they are expensive.

antrobus

Pennywise wrote: »

....What is needed is some real government action to incentivise all this under-used potential housing stock to be put back into long term residential use. ....

Something like an Empty Homes strategy?
http://cfg.homesandcommunities.co.uk/ourwork/empty-homes

We actually have very few 'empty homes' in the UK compared to some of our European neighbours.

Pennywise wrote: »

..Preferably a mix of higher taxation on under-used properties and grants/incentives for owners to either convert to residential or sell to people will will renovate, and grants/incentives for people to sell and downsize.

CLAPTON wrote: »

Any party that seriously targets under occupation of the owner occupier homes, is likely to form the opposition for the next 100 years.

Well, isn't any party that seriously targets under occupation of owner occupier homes, by actually offering the owners money to move simply handing taxpayers money to the already wealthy?

I'd have thought it would be better to take that taxpayers money and spend it on actually building a house.