Milliband promises rent controls

antrobus

cells wrote: »

£1k a month is almost exactly 1/3rd the gross take home average wage in London OR 44% of net pay after income taxes....

And if you'd picked a different number it would have been 54% of net pay, or 34% of net pay.

Still a random number.:rotfl:

cells wrote: »

...But the real rational of "the plan" is that it will force the country to fix its housing problem. Such a rent cap would actually result in more homes built in the mid to long term

Ah, so basically you are saying that your cunning plan is to introduce a cap on rents which will f*&# things up so badly that we will be forced to do something about it.

Splendid.:)

cells

ukcarper wrote: »

I wonder how those flats would be allocated.

If there was a cap in rents, just for arguments sake lets talk just about london for a moment and lets put the cap at £1000 per month for a 3-bed (less for smaller, more for bigger)

---

Pros

The net conversion of owner homes to BTL homes stops instantly

A slower but still notable sell off in BTLs towards owners

Improved the lives of 5+ million rental households nationwide at the cost of perhaps !!!!ing off 1 million landlord households (so ratio of happy to sad is 5x)

A big decrease in the housing benefits bill

---

Cons/Differences/Possible positives

This will force more people out of London (or more likely slow its growth in population). This is probably needed as London over the last 15 years took more than its fair share of population growth

Rentals will be hard to find if you are not a perfect tenant. Effectively the rent cap will allow landlords to be very picky about who they take.

As a result of the rent cap the BTL sector will sell off slowly AND tenants will start living less dense (no need to live 6 to a 3 bed flat, you can now maybe afford to live 3 to a 3 bed flat thanks to the cap)......this will result in literally a portion of people not able to find ANY housing.......which will mean the bed&breakfasts and hostels fill up rapidly to meet this urgent need to avoid lots of homelessness

---

Very quickly, perhaps in just 1-2 years, the government will be faced with a true shortage of homes and a crisis of mass homelessness (maybe in excess of 100,000 people and growing)

currently the private rental market is masking the huge under supply of new builds as renters are forced to rent more and more and more people to a flat/house. A rent cap will stop that

So very rapidly, the government would have no choice but to allow house building to grow to a more sustainable level of 400,000 units a year and that will avoid the homelessness problem



and then some 20 years down the line, the caps can be removed and rents will not rise thanks to the 8 million or so new homes built in that time



BTW I think thats pretty much what happened between 1970-1990
House building was decent vs demographics, especially in london where we were building lots of homes even while a million people were leaving london.

cells

antrobus wrote: »

Ah, so basically you are saying that your cunning plan is to introduce a cap on rents which will f*&# things up so badly that we will be forced to do something about it.

Splendid.:)

effectively yes

currently things are fcked up as they stand, we should be building 300k + a year new homes while we only give stamps for 120k a year

That fukup is benefiting the existing owners of homes and especially landlords who own multiple homes and its been going on for at least 10 years if not more

the pendulum might as well sing in the other direction for 10 years

cells

Without a rent cap we have this. All very negative

Falling owner occupation with the PrivateRental sector growing very rapidly by about 300,000 units a year.

Increasing cramming and overcrowded homes

High and increasing HB bill

A lost 500,000+ jobs and some £50B lost in GDP

---

With a rent cap we would see quite rapidly the following positives

A complete stop in the 300,000 net conversions to rented homes to zero or even a modest negative number

The build rate of new homes would jump to 300,000 a year maybe more. Employing 500,000+ people and contributing £50B plus to GDP

Over 5 million renting households better off, and only 1 million BTL households worse off

Population growth more even in the country (unlike the last 15 years where London has taken far more than its per capita share)

---

On balance, the system we have vs rent caps, the rent caps is probably better. They can be removed some 10 years later

IronWolf

cells wrote: »

If there was a cap in rents, just for arguments sake lets talk just about london for a moment and lets put the cap at £1000 per month for a 3-bed (less for smaller, more for bigger)

---

Pros

The net conversion of owner homes to BTL homes stops instantly

A slower but still notable sell off in BTLs towards owners

Improved the lives of 5+ million rental households nationwide at the cost of perhaps !!!!ing off 1 million landlord households (so ratio of happy to sad is 5x)

A big decrease in the housing benefits bill

---

Cons/Differences/Possible positives

This will force more people out of London (or more likely slow its growth in population). This is probably needed as London over the last 15 years took more than its fair share of population growth

Rentals will be hard to find if you are not a perfect tenant. Effectively the rent cap will allow landlords to be very picky about who they take.

As a result of the rent cap the BTL sector will sell off slowly AND tenants will start living less dense (no need to live 6 to a 3 bed flat, you can now maybe afford to live 3 to a 3 bed flat thanks to the cap)......this will result in literally a portion of people not able to find ANY housing.......which will mean the bed&breakfasts and hostels fill up rapidly to meet this urgent need to avoid lots of homelessness

---

Very quickly, perhaps in just 1-2 years, the government will be faced with a true shortage of homes and a crisis of mass homelessness (maybe in excess of 100,000 people and growing)

currently the private rental market is masking the huge under supply of new builds as renters are forced to rent more and more and more people to a flat/house. A rent cap will stop that

So very rapidly, the government would have no choice but to allow house building to grow to a more sustainable level of 400,000 units a year and that will avoid the homelessness problem



and then some 20 years down the line, the caps can be removed and rents will not rise thanks to the 8 million or so new homes built in that time



BTW I think thats pretty much what happened between 1970-1990
House building was decent vs demographics, especially in london where we were building lots of homes even while a million people were leaving london.

Great plan.....

Or you could just, you know, build more homes

cells

IronWolf wrote: »

Great plan.....

Or you could just, you know, build more homes

the reality is that since the year 2000 people have been calling for that and the fact is that we build now the fewest homes on record so the idea of just saying build more homes seems not to work

Currently the rental sector is taking care of the lack of new builds problem by converting/adding 300,000 BTLs a year and also by the existing stock of 5 million plus rentals being lived in more and more densely every year. That is not a good thing


It seems while the rental sector is free to "solve" the housing shortage build rates will stay at historically low levels. Rent caps stop the rental sector from massively expanding and cramming more and more people into it and thus will force more building. There will simply be no choice, it will be build more or have hundreds of thousands sleeping in tents. Right now the choice is, build more or cram more and it seems cram more is what is the easier choice for politicos

CLAPTON

brilliant plan worthy of Baldrick

cells

CLAPTON wrote: »

brilliant plan worthy of Baldrick

I dont think its at all likely

But its silly to look at a proposal and judge it good or bad without looking at what it is replacing

A rent cap isnt replacing utopia, its replacing one highly dysfunctional system with another system that is not ideal but perhaps not as bad

tom9980

cells wrote: »

I dont think its at all likely

But its silly to look at a proposal and judge it good or bad without looking at what it is replacing

A rent cap isnt replacing utopia, its replacing one highly dysfunctional system with another system that is not ideal but perhaps not as bad

causing lots of investors to go bust and struggle is a good idea? you will just make people less likely to invest similar to how pension scandals stopped people paying into pensions, clever idea that isnt it?

Ideally you want to get those investors to invest in building property by making it easier to get planning permission to build, especially for individuals. I would much rather build 6 properties on land owned by my mother in law than buy more property to rent out but there is no profit in doing so given the impossibility of planning and all the other red tape involved.

cells

tom9980 wrote: »

causing lots of investors to go bust and struggle is a good idea?

its not a perfect idea, but it is better than causing millions of renters to struggle and suffer with the current system we have? it it better than not having 500,000 employed in building more homes?

tom9980 wrote: »

you will just make people less likely to invest similar to how pension scandals stopped people paying into pensions, clever idea that isnt it?

it is a cleaver idea because the result will be MORE investment and the true type of investment (capital formation) rather than capital asset price inflation.

The reason is, although the rent cap will slow BTL investment, that will be more than offset by an increase in build rates. My guess is that as a result of the impact of such a rent cap build reates investment will more than double

tom9980 wrote: »

Ideally you want to get those investors to invest in building property by making it easier to get planning permission to build, especially for individuals. I would much rather build 6 properties on land owned by my mother in law than buy more property to rent out but there is no profit in doing so given the impossibility of planning and all the other red tape involved.

for a long time the planning system has been criticised for not allowing building enough homes. Even back in the labor days of brown and blair there were ideas for eco-towns and for build rates to go to over 250,000 a year. Instead it is half of that now....

a big part of that reason is the free market we have in rentals. The rental sector grows and people cram in more and more to avoid people having to sleep in parks tents and cars.


put a cap on rents and the choice will no longer be, build more or cram more. It will be build more or see hundreds of thousands of people sleeping on the streets and if those are the choices we will see more building