Right to buy on privately rented homes

chucknorris

Green_Bear wrote: »

Well, obviously these things exist on spectrum. What you describe is a watered down version of my scenario.
But the direction it has on prices is probably the same, just to a lesser extent.

I can't see why it would have much of an effect on prices, the only concern that I would have, would be that you had to plan selling at intervals of 3 years. Which isn't a that much of a problem to take on board. I have 2 more to sell (on top of the one that I am selling now), I can more or less say now, that I would sell one at the end of the first 3 years, and the last one 3 or 6 years later. My wife would sell her properties 9 years later (one of which I have a share in).

Green_Bear

Cakeguts wrote: »

Depends where you are.


There is also something else. Before the introduction of the assured shorthold tenancy the only properties to rent at all in the local area were in rough areas due to the rent acts. They were all 2 bed terraces in bad areas and the properties were cheap. Very cheap. There were still people who could not afford to buy them. There were also people living in rented properties owned by the buyers of local mills who offered them to the tenants at a significant discount and there were still tenants who couldn't afford to buy them.


At present there are council tenants who can't afford to buy their council flats because of the service charges for maintenance.

These were the only PRIVATE sector rental properties available.
Council tenancies were much easier pre-1980s.

It seems like a forgotten world, but in some areas, you could walk into the local council offices, show some ID, sign the tenancy agreement and pick up a set of keys there and then.

These were obviously the worst properties. Many people held out for better to become available.

I have a relative who worked for the council handing out these properties in Liverpool. This was the early 1970s and there were families coming over from Northern Ireland where whole streets had been burnt down. They had one small bag of belongings each. Today we'd call it ethnic cleansing.

phillw

Malthusian wrote: »

If a political party makes vague proposals we can't be blamed for attempting to fill in the gaps. It's impossible to discuss otherwise.

If you don't feel capable of discussing it without building a straw man then maybe you shouldn't discuss it.

I seem to be able to.

westernpromise

I've let out four different properties over the last 24 years and in that time not one single tenant, of I suppose 20-odd, has ever asked me for a three-year tenancy.

I was myself a tenant for ten of those years and I never asked for a three-year tenancy either.

Green_Bear

chucknorris wrote: »

I can't see why it would have much of an effect on prices, the only concern that I would have, would be that you had to plan selling at intervals of 3 years. Which isn't a that much of a problem to take on board. My wife would sell her properties 9 years later (one of which I have a share in).

I'd expect there to be less LLs interested in buying your properties, compared to the days of more LL friendly rules. So less demand from LL buyers.

Plus, if rental income is capped, but dividends, bond coupons and bank deposit interest is not - then investors will move away from residential property and towards other assets.

Whilst rental income is capped, maintenance costs are not. So if we get high general inflation, that can be an absolute killer.

Were you around in the 1970s?

Green_Bear

westernpromise wrote: »

I've let out four different properties over the last 24 years and in that time not one single tenant, of I suppose 20-odd, has ever asked me for a three-year tenancy.

I was myself a tenant for ten of those years and I never asked for a three-year tenancy either.

Well that is interesting. I'm not a LL, so have little direct experience.
But when you applied for a rental property in the past (eg council, secure tenancy etc), no one asked what length of tenancy you wanted. The tenancy terms were standardised in law. You could sign what ever document you wanted, but once you'd moved in and paid rent you had a secure tenancy. What the tenant or landlord wanted was not relevant.

A bit like getting married. The terms of contract could not be altered. It was set by the govt, not the parties involved.

chucknorris

Green_Bear wrote: »

I'd expect there to be less LLs interested in buying your properties, compared to the days of more LL friendly rules. So less demand from LL buyers.

Plus, if rental income is capped, but dividends, bond coupons and bank deposit interest is not - then investors will move away from residential property and towards other assets.

Whilst rental income is capped, maintenance costs are not. So if we get high general inflation, that can be an absolute killer.

Were you around in the 1970s?

I've been moving away from property for over 10 years, I have more in equities now, than I do in property:

40% Equities (including 13% REIT)
29% Investment property
16% Fixed pension (DB)
8% Cash
7% Individual corporate bonds

The above does not include a property sale that seems (fingers crossed) to be going though right now.

Malthusian

phillw wrote: »

If you don't feel capable of discussing it without building a straw man then maybe you shouldn't discuss it.

I seem to be able to.

Telling people that they're not allowed to discuss the proposal until Labour releases additional details that Labour hasn't worked out yet is not discussion.

westernpromise wrote: »

I've let out four different properties over the last 24 years and in that time not one single tenant, of I suppose 20-odd, has ever asked me for a three-year tenancy.

I was myself a tenant for ten of those years and I never asked for a three-year tenancy either.

Well, the funny thing is that if you're a good tenant you don't really need one. Asking for a three-year tenancy ties you down for three years. All you gain in return is the assurance that the landlord won't suddenly decide to sell up and chuck you out rather than sell the property with a sitting, reliable tenant. The first usually outweighs the second.

Green_Bear

MobileSaver wrote: »

The law will never be changed so that legal charges on property become invalid; even the Labour party wouldn't be crazy enough to try such a thing.



The landlord wouldn't have a loss.



Even comrade Corbyn, when he first touted the idea, admitted that the State would have to cover the discount. Unfortunately for him he was going to use BTL tax allowances to fund it but these have already been removed so it's difficult to see where the money would come from now...

The charge on the property would not have to be cancelled. It could just be transferred to the new owner.*

If a landlord buys a house for £100k. Gets a tenant, who then buys the house from the landlord for £80k, the landlord has made a £20k loss.

*eg like in divorce cases.

westernpromise

The point that nobody who is keen on exterminating the kulaks ever seems to absorb is the differential occupancy rates between rented and owner occupied properties.

A 5-bedroom 3-reception house converted to HMO may house 16 people. Drive the kulak out of the lettings business and the house may well be sold to owner occupiers - but to a family of maybe five, not 16. That leaves a net 11 people homeless and looking for accommodation in whatever is left of the shrinking rental supply. That's in the optimal case where the buyers aren't existing owner-occupiers trading up for more space - in which case there'd be 16 homeless ex-tenants.

This applies to pretty well all properties regardless of size. Given that renting is generally more expensive than owning, you need three incomes to serve the costs of renting where two would cover that of owning. As a result, when three tenants are evicted from a 2-bed flat, two owner-occupiers will succeed them. The 2-bedder that I occupied first singly and then as part of a couple has been occupied by three people for all but one of the last 15 years.

Although inconvenient for landlord-phobes, this problem isn't going to go away. Twenty years ago, nobody had heard of an HMO. Denial via the usual lazy assumption that tenants convert one-for-one to owner occupiers has no basis in fact. You only have to look at the nature of rental sector growth to appreciate this. If one magically converted the entire rental sector (20% or so) to owner-occupied you'd make somewhere between 5 and 10% of the population homeless.