Milliband promises rent controls

CLAPTON

cepheus wrote: »

Rent controls did just the job in Germany, affordable housing for everyone.

did the Germans build any houses during this period or do consider that house building isn't the solution to a housing shortage?

chewmylegoff

lawriejones1 wrote: »

The issue is the relationship of mortgage rates to rents. Professionals understand the risk, amateurs want to pass this risk on to tenants. It's not fair at all.

If interest rates go up and your yield goes down, deal with it - it's the risk you take. Any of us in business had to cope with the VAT rise etc.

I think you will find "professional" landlords want to make a profit. You aren't going to find hordes of so-called professional landlords willing to make big losses on their rental portfolios on the basis that they knew there was a risk that mortgage rates might rise. On the contrary, professional landlords tend to be in it for yield whereas amateurs are often in it for HPI. You only need to read the relevant forum here to find plenty of examples of chancers whose BTL rent doesn't cover their mortgage interest payments.

HAMISH_MCTAVISH

cepheus wrote: »

Rent controls did just the job in Germany, affordable housing for everyone.

Eh?




Rent controls had little to nothing to do with German house prices.

Completely different dynamic of supply and demand to the UK, with different changes in population, housebuilding, economic conditions, etc after reunification and through the integration years.

I note prices are soaring now though, despite still having rent controls.

Cyberman60

ukcarper wrote: »

I've heard that before 3 year tenacies price increase no more than inflation for duration of contract, sounds reasonable to me.

Sounds good but you totally missed the point !!! :rotfl:

The point is that landlords will put up initial rents as they will compensate up front for the lower rents over the long term. Thus, rent controls will not work, just as a price freeze on energy will also not work for the same obvious reason, clear to most people except to socialists !!!


:rotfl: :rotfl:

chewmylegoff

Jon_B wrote: »

My rent hasn't increased for 5 years.

Opportunist Ed, as per usual.

I fear for the future of the UK.

Under labour's current plans it would have probably increased by CPI every year of that 5 year period...

thequant

CLAPTON wrote: »

It's probably true that if one makes letting less attractive some landlords will sell and so there will be an increase in owner occupation.

However, most owner occupiers tend to have lower number of people per property than renters (most owners don't go in for multiple occupancies whilst rental businesses do).

That would mean people without anywhere to live at all and not market forces to find a solution.
Presumably one would expect the state to step in and stop the people sleeping on the street.

Totally spot on,


The reason why the free market works, is that it creates an incentive for stakeholders to use the existing stock in the most efficient way possible.


The invisible hand of Adam Smith, means that the market will seek to accommodate as many people as possible to maximise the return.


If we intervene into the market that will force some LL's to leave the sector, thus reducing the supply and thus actually force up prices as the demand per property rises.


And here is the flaw with Labours plan, It is still based on the market rent which could well be forced up by this policy.


Thus not only making it more expensive for renters, but also putting others onto the street.

michaels

thequant wrote: »

Totally spot on,


The reason why the free market works, is that it creates an incentive for stakeholders to use the existing stock in the most efficient way possible.


The invisible hand of Adam Smith, means that the market will seek to accommodate as many people as possible to maximise the return.


If we intervene into the market that will force some LL's to leave the sector, thus reducing the supply and thus actually force up prices as the demand per property rises.


And here is the flaw with Labours plan, It is still based on the market rent which could well be forced up by this policy.


Thus not only making it more expensive for renters, but also putting others onto the street.

Come off it, the economics of the policy do not matter at all (economists failed to predict the credit crash so basically everything they say right back to supply and demand is wrong), all that matters is whether the focus groups say that more uninformed voters like the sound of the policy or not.

chucknorris

Non of our tenants have ever wanted to sign a 2 year contract, never mind a 3 year one. But we don't tend to rent to families, more professional sharers, who tend to want flexibility. I suppose that it will probably be more desirable for families with children at school.

GwylimT

I personally agree with rent controls, however nothing is going to be a quick fix.

While I do think rent controls shouls be introduced it is only the tip of the iceburg, the most important step is to build more social housing. While I do believe right to buy is brilliant for some people, it should have only been allowed if x amount of money from sales was safe guarded for further social building projects.

I also think both councils, private individuals and private businesa should be penalised for having long standing empty homes.

My grandma lives in a council property in an area with a substantial waiting list for social housing, on her street alone there are over 14 empty properties because the council who own them are unwilling to renovate them to be able to rent them out. So when tenanta moved out they were simply boarded up. The renovation needed at the time of boarding was new boilers to replace back boilers and wired smoke and carbon monoxide alarms, now they will be in such a state much more will need doing. These are mainly three bed semi's, some are detached with large gardens and a garage each, they are lovely family homes near a fantastic secondary school.

If councila are willing to let this happen they should be fined until the house is either offered for rent or sold.

Unfortunately their is not an easy fix for our housing problem, not only are our parties incapable of tackling this issue appropriately, they haven't got the guts.

GwylimT

chucknorris wrote: »

Non of our tenants have ever wanted to sign a 2 year contract, never mind a 3 year one.

Yes some people do want more flexibility, they also want to move quickly if their landlord is poor at his/her job. Our current tenants have been in place for nine years now, but even to then a three year tenancy may be a nerve wrackinf commitment.