Rents Frozen In Scotland From Today

Eldi_Dos

@ theartfullodger

The point I was making was after the period of inflation your mortgage X earnings ratio swung in your favour,after about three years at that time mine was 1.5 of earnings, which looking back seems a world away from some of the figures bandied about today.
I am not saying it was easy, especially if you had stretched yourself but if you had a bit of a cushion it was doable and in my case made it easier to move onto the next stage of property ownership.

Sarah1Mitty2

theartfullodger said:

AJRBADGER said:

The Scottish Government are the ones who, without any warning, have changed this. The change has happened whilst - in my case -the eviction process had started, and seems to usurp my contractual agreement, so if my tenant won't move out, it isn't realistic to sell the flat..... and there is little I can do about it - even if they stop paying.

How do you even plan for that risk?

Without warning unfair in my opinion, the complexion of government has been moving that way for some time, just recall what several politicians have been saying.  Government exercising their powers (it's what they are employed to do).  Sturgeon doing something positive for the vulnerable etc unlike Thick Lizzy who only seems to care about wealthy companies and wealthy members of the Tory party.

 Well, eviction regulations had changed during Covid & recently.  Think the grounds were still discretionary anyway.

(NB Currently trying to flog off a property, Highlands: Had served notice to leave (discretionary due to the various cost-of-leaving crises etc , surprised tenants actually left when the didn't need to.  Selling due to age - 74, ill health & travel - 10hr-ish trip each way to property: Nothing to do with tax or legislation changes. )

How do you plan? Well, ensure you've a bit of financial "fat" for rainy days etc, expect things to go wrong from time2time, read the signs as to what is likely and don't believe the rabid red-tops who keep telling us that property prices always go up.  And the rest... etc etc etc/...


Slàinte mhath!

Alderbank said:

I have worked with social housing providers in the north west of England and have met a lot of people in this situation. One  company I worked with opened a new office in a small Lancashire town and I was shocked at the number of families who turned up on the first day seeking a new home to escape overcrowding.
I have no personal experience of the midlands or south of England. However the charity Shelter says in England over 1.5 million people are forced to live in overcrowded social homes. One in six residents now live in an overcrowded home. 

Shelter's analysis of the latest government data shows 730,000 children in England are growing up in overcrowded social homes.

What experience or first hand knowledge do you have, Sarah?

Did the tenants find another place easily enough?

MisterMotivated

TripleH said:

If you want to reduce your risk then you can sell, but now, you can't sell easily because only landlords would buy a tenanted house, but it would have to be at a very low price to justify the return on capital.

Not to mention, if you have a problem tenant (potentially in arrears), rather than just wanting to get out of the business, your struggle to find a buyer will be made even more difficult.

As a landlord, I personally have no issues with the rent freeze (I recently declined the letting agents' suggestions of an increase).  However, if there's going to be a ban on evictions, I think the government should have funding available for landlords to be able to claim back any unpaid rent during this period.  Most businesses can take steps to reduce/limit their losses, but being forced to continue to provide a service to someone refusing to pay for that service is simply ridiculous.

Sarah1Mitty2

They are guessing (rightly in my opinion) that most tenants will continue to pay as normal.

MisterMotivated

Sarah1Mitty2 said:

They are guessing (rightly in my opinion) that most tenants will continue to pay as normal.

Many will, but this guess disregards one of the main reasons for landlords needing to serve notice/start eviction proceedings in the first place

Sarah1Mitty2

It is supposedly just a short term "emergency" step, six months won`t make much difference to most landlords?

MisterMotivated

Even a short term, half-year "emergency" period of unpaid rent is going to run into several thousand pounds per household.  The vast majority of landlords (ideally all) should be able to withstand that sort of loss, but my point is that they shouldn't be forced into having to withstand it due to the government's half-baked ideas.  There are no proposals for a ban on having to pay their mortgages or carry out any necessary repairs/regulatory checks.

Getting_greyer

AJRBADGER said:

k12479 said:

AJRBADGER said:

My main issue, I'm wanting to sell my flat, and that this government decision may effectively force me to continue being a landlord until the eviction ban is lifted... 

Stick it into an auction. Let properties with existing tenants are commonplace.

In doing that you are excluding so much of the market. It's a perfect flat for a single first time buyer.

The flat is worth about £55k, and well..... I probably want about £55k for it. £55k is a good bit below the inflation adjusted number I paid for it (£44k in 2007, then £4k changing from storage to central heating + £4k modernising and insulating it + £2k flooring the attic/cladding and plastering the beams to make it a usable - albeit inhabitable - space).

Putting it up for auction, I might be voluntarily giving away £10-20k as I'd only expect it to make £35-45k being sold tenanted (you almost never see tenanted properties being sold in my area, and advised not to sell it tenanted by estate agent quoting those valuations). I don't think it is realistic to ask somebody to potentially take that hit.

I don't think it's an attractive proposition as the tenant pays £275 a month, so would undoubtedly sell low at auction.

I guess depends upon if they're working but could you not like offer the tenant to buy at say 60k but offer to gift them 5% deposit and maybe bit towards legals. £3-4k, bit might mean you're free of the flat quicker.

SeanG79

Not all Landlords are cash rich, just like not all business owners are cash rich. 

Putting in a price freeze when inflation is admittedly highest in decades is short-sighted and do nothing to resolve any issues over the longer term. Added to that a Landlord who cannot afford to keep their business running without rent payments cannot now evict tenants and sell the property.

All the while, the Landlord is obliged to maintain, repair, etc. 

Most Landlords cannot just stop paying because there will be some equity in the property with current lending rules and so they are an incredibly soft target. 

Decisions like these can literally bankrupt Landlords, but because they are perceived differently, no one cares. Remove all the private landlords and see what state the country is left in afterwards. 

Sarah1Mitty2

I can`t see a reason for a long term renter to not pay their rent unless they are in genuine hardship, which is the reason the Scottish government introduced this! Why would you jeopardise your credit score and your future renting choices by trying to rip off a landlord, just doesn`t  make sense!