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Repeal S21.
Comments
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lighting_up_the_chalice wrote: »The truth is that the student market isn't what it used to be. More and more specialist student accommodation is being built and fewer now have to rely on the "Rigsby's" of this world. Students are also quite demanding in terms of what they expect to be provided and have a far higher instance of fall-outs and tenancy/contract breaches. For most, it is their first taste of independent living and their lack of skills in this area can prove costly to a landlord unprepared for it.
But they have to live somewhere.
Where your argument falls down is in the numbers. If you have 100 students, and 200 rooms which LLs wish to rent to students, then the 100 rooms let will be dirt cheap and the 100 unlet will cost the LL in voids, unless he dips into a different market, or sells up.
Students are also canny. 'Specialist' accommodation appeals to foreign students but is too expensive for homegrown. The issues that students bring are not new and easily managed by any half competent LL.
My argument doesn't fall down in the University cities; it's all about cutting the cloth to suit. Btw, if the hypothetical repeal of s21 is to follow the lines of the Scots model, I can see tenant tenure still exposed.
I suspect the Sword of Damocles will remain for the foreseeable.:oMornië utulië0 -
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Lord_Baltimore wrote: »Students are also canny. 'Specialist' accommodation appeals to foreign students but is too expensive for homegrown. The issues that students bring are not new and easily managed by any half competent LL.
My argument doesn't fall down in the University cities; it's all about cutting the cloth to suit. Btw, if the hypothetical repeal of s21 is to follow the lines of the Scots model, I can see tenant tenure still exposed.
I suspect the Sword of Damocles will remain for the foreseeable.:o
Your argument falls down if there isn't a sudden, and massive, explosion in the numbers of students requiring accommodation. That isn't being forecast.0 -
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lighting_up_the_chalice wrote: »Enlighten me, oh wise one. How would it reduce supply?
Jj pointed it out on the previous page, but i guess you missed it.
If you remove s.21 you increase the cost of entry into and exit from the market, You therefore disincentivise a large number of potential investors.
In a functioning market to maintain supply you need new entrants to replace those that exit. Removing s.21 means more people will exit and less will enter.
The only way supply would be maintained (in the longer term) was if those increased costs could be passed on to tenants through increased rents.
Let me give you an example.
A significant number of people let properties under residential mortgages with CTL from their mortgage lender. CTL is designed as temporary arrangement. If s.21 was removed then mortgage lenders could not offer CTL arrangements under the same terms because the let becomes open ended.
Those people may then be required to remortgage onto higher cost BTL products if they wished to let or continue to let their properties.
BTL rates would also increase, again due to the increased risk of open ended tenancies.
Those people who want to move to a new job at short notice find that they can't let their properties.
Those that want to go abroad for a couple of years cant let their properties.
Those couples who move in together and one of them has a flat in negative equity or low equity. They cant let the flat.
So the great idea of removing s.21 to protect tenants has now actually had the effect of reducing choice of properties, increasing rents and at the same time reducing social mobility.
What an excellent idea!0 -
How much is a property with assured or, worse, Rent Act tenants is worth compared to one with vacant possession or AST tenants? Who would buy such property?
There lies the main issue.
No-one in their right mind would invest in property if it is impossible to evict tenants.
If might cause a brief crash if many existing landlords decide to dump their properties while they can, but it would be accompanied by a proportional wave of eviction of all those tenants.
Some people may thus buy properties at a good price, but it wouldn't last.
Those who couldn't buy (or just wouldn't want to) would be left homeless since the supply of to let properties would have dried up. Local authorities would see the cost of emergency housing skyrocket.
Conclusion: The only winners would be those with cash in the bank, ready and looking to buy their own home if they were looking in areas of high concentrations of BTL properties.
This would probably not last more than 1-2 years.0 -
Jj pointed it out on the previous page, but i guess you missed it.
If you remove s.21 you increase the cost of entry into and exit from the market, You therefore disincentivise a large number of potential investors.
In a functioning market to maintain supply you need new entrants to replace those that exit. Removing s.21 means more people will exit and less will enter.
The only way supply would be maintained (in the longer term) was if those increased costs could be passed on to tenants through increased rents.
Let me give you an example.
A significant number of people let properties under residential mortgages with CTL from their mortgage lender. CTL is designed as temporary arrangement. If s.21 was removed then mortgage lenders could not offer CTL arrangements under the same terms because the let becomes open ended.
Those people may then be required to remortgage onto higher cost BTL products if they wished to let or continue to let their properties.
BTL rates would also increase, again due to the increased risk of open ended tenancies.
Those people who want to move to a new job at short notice find that they can't let their properties.
Those that want to go abroad for a couple of years cant let their properties.
Those couples who move in together and one of them has a flat in negative equity or low equity. They cant let the flat.
So the great idea of removing s.21 to protect tenants has now actually had the effect of reducing choice of properties, increasing rents and at the same time reducing social mobility.
What an excellent idea!
I would suggest that increasing security and, in so doing, minimising churn would far outweigh the loss of a few "accidental" landlords who can't offer their properties on a short-term basis. It may even encourage them to sell up rather than face the costs of an empty property.
You're free to try again, if you like.0 -
jjlandlord wrote: »How much is a property with assured or, worse, Rent Act tenants is worth compared to one with vacant possession or AST tenants? Who would buy such property?
There lies the main issue.
No-one in their right mind would invest in property if it is impossible to evict tenants.
If might cause a brief crash if many existing landlords decide to dump their properties while they can, but it would be accompanied by a proportional wave of eviction of all those tenants.
Some people may thus buy properties at a good price, but it wouldn't last.
Those who couldn't buy (or just wouldn't want to) would be left homeless since the supply of to let properties would have dried up. Local authorities would see the cost of emergency housing skyrocket.
Conclusion: The only winners would be those with cash in the bank, ready and looking to buy their own home if they were looking in areas of high concentrations of BTL properties.
This would probably not last more than 1-2 years.
Let me get this straight. You are predicting a short term house price crash at exactly the time when the number of former tenants, many of whom are looking to buy, are thrown into the housing market? And you can't guess what happens next?0 -
lighting_up_the_chalice wrote: »And you can't guess what happens next?
I can, and I wrote it, but you seem to have difficulty with reading.0
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