Monday 17 December 2012

Feeling Validated

Renting is in the news, at long last. According to the latest census results, home-ownership is in decline, and renters are increasing (figures don’t seem to include how many owners possess more than one home ie buy-to let, but we’ll ignore that, shall we?)

Do I feel validated? Or peeved about the people who commented ‘why not buy a flat/it’s not that bad’? I’m trying to be generous, but some of the news agencies now so very angry (or at least vocal) about the existence and state of renting have been whining about house prices falling as if that’s a bad thing.

Now, somebody in Parliament reads rentergirl regularly. Unless Camoron is reading this blog before sloping of to howl at the moon and drink the blood of helpless kittens, I’m thinking it’s Labour enjoying my lyrical insights hereabouts.

And recently, Labour issued a document – having realised that there are votes to grab, with renters growing in number and anger mounting. One policy solution is predictably safe: longer tenancies, therefore mirroring Shelter’s recently proposed Stable Renting Contract and my own much re-stated hatred of Assured Short Term Tenancies (Accursed Short-Term Travesties.)

Labour knows of the evil done by spiralling rents, so I’m suggesting two reasons for their recent embracing of no-higher-than-inflation rent rises: it’s popular with tenants (less so with profiteering landlords). It will also save billions (and I mean billions) in the housing benefits paid over to scrounging, sponging, shirking landlords (sorry, but they reap the rewards of housing benefit/LHA, not tenants, and that’s the language used on claimants.) Rents must rise no more than inflation. All very well and good, but what if inflation rises again (which will happen at some point.)

In stressing the harm caused by insecurity, Labour repeatedly use a phrase that makes me scream: ‘hard working families.’ What about singles/childless couples… etc? I’ve written before about the effect of transience and insecurity on communities, schools and health. So longer tenancies are official policy, which is good, but moving every six months is detrimental to everyone affected, even (or especially?) those without paid work.

There was no mention of restraining feral letting-agents, although the heroic Jeremy Corbyn MP tried his luck with an early day motion. Sad thing is, this is the one thing popular with both landlords and tenants (everyone hates letting agents and they don’t care) but it’s doomed, unless the Libdems agree. Nobody in power seems to have grasped that letting agents are the prime movers for private rented profiteering. It’s not even landlords: letting agents place an inherent above inflation rent rise in many contracts.

So we all agree. Renting must change, and soon. If we all shout together, will parliament hear us? Follow the Scottish model, and ban letting agents from charging tenants: landlords can pay instead.

If you do this, we will love you forever. We will wash your car. We’ll even let the odd little expenses thing slip by. We might even vote for you.

And finally, to MP’s, commentators, pressure groups and think-tanks. Sorry. I can’t resist it.

I TOLD YOU SO!!!!

(I did though. I really did.)


27 comments:

Burbage said...

Sure you told them. But don't start feeling validated (or vindicated) by them yet.

The best thing that's happened in the last fifteen years has been (Tory) Newham's decision to register all private landlords, probably sparked by the discovery in the pre-Olympic clean-up of hundreds of slumlords. It's unproven, but it's a start in roughly the right place. And worth a damn sight more than any number of squeaks from the wilderness.

But Newham is just one borough, and reports are trickling it that suggest it's far from the only place in Britain rife with landlordly vermin.

Labour have not responded to that. They are responding to a different problem. They are not offering to challenge the spurious fees and charges that their deposit-protection scheme - an unnecessary and legalistic response to rampant theft - spawned. They are offering to make a small, and presumably optional, change to tenancy agreements that will primarily benefit the sort of people who politicians have within their families. It won't solve 90% of the problems you've documented over the years - the discrimination, the intimidation, the intrusions or the negligence. There are no plans for proper rent controls, reasonable regulations, routine inspections or useful means of redress. And that matters because, as you well know, what it says on the agreement bears little relation to what happens on the ground. If rents can't be increased above inflation within a tenancy, then landlords will respond. With more and higher fees, by racking up the rents when tenancies expire and continuing to employ all the merry techniques they currently use to churn tenancies.

You can feel justified, if you like. But if you should feel validated by anyone it's the readership you've built among the tired, the annoyed, the desperate, the frightened and the angry. Not some policy-unit pipsqueak looking to fill some speechtime.

Barney from Newington said...

Point 1
When Assured tenancies were introduced in 1988 the government argued that the ban on premiums which had been in place since 1947 was obsolete as rent were no longer controlled.

In Scotland the opposition successfully argued that the lifting of the ban on premiums could lead to key monies being taken for the grant of a lease.

This ban on premiums in Scotland has now been abused to ban fees such as referencing fees.

The ban on premiums in Scotland should really have been lifted as there was no evidence of key monies being taken in England which no longer had a ban.

Point 2
One of the reasons that renting is on the increase is because of the introduction of the short assured tenancy. This has led to a rise in supply of properties and to do away with it would be a complete disaster.

Point 3
Finally rents in Scotland have lagged inflation by 10% (source Citylets Quarterly report) so the rents are soaring argument is a complete nonsense.

RenterGirl said...

I know, Burbage, but let me have on ebrief moment of joy.

Hey Barney: The Scottish Parliament says fees are illegal, hence they are! The ct banning them comes seperately in 1984. Which means landlords pay for reference fees etc. Just as they should. You're welcome.

Barney from Newington said...

The point being the ban on premiums was originally related to rent control it was then used to protect tenants from landlords charging key monies and now has been extended to referencing fees.

Now that referencing fees have been banned there have been reports that tenants in Scotland have started reserving multiple properties before pulling out at the last moment.

RenterGirl said...

No, they're not. The agents charging illegal fees meanwhile does have actual evidence. nd they're still doing it.

Rich Tee said...

Good work.

What occurred to me recently is this: the Conservatives traditionally depend on the votes of homeowners.

Private rented tenants have little reason to vote Conservative. So a reduction in home ownership means fewer Conservative voters.

So they'd better pull their finger out pretty quick if they ever want a majority in parliament to govern again.

space cadet said...

"Now that referencing fees have been banned there have been reports that tenants in Scotland have started reserving multiple properties before pulling out at the last moment."

But then the reservation fee "taken out of your first month's rent" would be enough to stop you doing that.

RenterGirl said...

That, Rich Tee, is very good point. Tenants have votes, which (if they cn register) might not go to self-proclaimed 'party of the home owner.'
nd yep, Space Cadet, if 'multiple reservations' is actually happening (it isn't FYI) then a small refunded non-retainable holding fee would stop it. If it's happening. Or just get people to pay the deposit? nd the sign the agreement?

Barney from Newington said...

space cadet

Legally in Scotland landlords or letting agents cannot keep a reservation fee if a tenancy does not go ahead.

This allows tenants to reserve multiple properties then negotiate down the rents on these properties before reclaiming their reservation fees for the properties that they have pulled out off renting.

Dazzla said...

Imagine that: tenants gaming the market. Did you think that only landlords and agents were allowed to do that?

space cadet said...

Oh Barney, you sound very much like a bitter letting agent? Scotland is leading the way for tenants with the continued abolition of premiums and its consultation on a strategy for the private rented sector: http://www.scotland.gov.uk/Publications/2012/04/5779

"This allows tenants to reserve multiple properties then negotiate down the rents on these properties before reclaiming their reservation fees for the properties that they have pulled out off renting."

Oh c'mon. Most tenants do not have spare cash to throw at multiple properties, let alone the time and inclination to play some kind of bargaining game on all of them and then reclaim all their monies in court. I imagine they're too busy with their day job.

Maybe you know tenants that have.. Maybe, just maybe, they wanted to find the perfect home, and that is their prerogative. Remember: we are talking about homes here.

If the LL should encounter such a tenant, and think them a timewaster for daring to bargain on price (shock horror) and wishing not to do so, then the LL can pull out of the deal in a speedy phone call to the agent.

I've certainly had enough agents waste my time!

Dazzla said...

@Burbage:

"You can feel justified, if you like. But if you should feel validated by anyone it's the readership you've built among the tired, the annoyed, the desperate, the frightened and the angry. Not some policy-unit pipsqueak looking to fill some speechtime."

That's unfair. RG knows that with a few exceptions, the commentariat on this blog is a choir highly receptive to preaching about the appalling state of rentals. That someone who is not only unconverted, but also possibly in a position to influence policy, is reading this blog is a massive step forward. Well done, I say.

RenterGirl said...

Hello everyone - yep, I also think Barney is bitter. I also know that tenants do not 'reserve' flats, as they usually hve to sign and pay to accept flat. Sorry!

Barney from Newington said...

SC

A reservation fee is currently only a small amount e.g. £200 so it is quite simple if you have a deposit of £1,000 to reserve five properties using your deposit.

It may be that reservation fees will have to go up to stop this abuse which will lead to more whinging from the anti-landlord lobby.

Re tenants not having the time to negotiate rents down; It is perfectly normal for properties to be reserved for up to six weeks for normal tenancies and up to five months for student tenancies so tenants have plenty of time to negotiate down the rents.

More importantly it has already started happening and no doubt the anti-landlord lobby will just put their fingers in their ears and say la la la we can't hear you.

Re Scotland leading the way; As The Scottish Parliament are still enforcing rent control legislation from 1947 then I would argue that England and Wales are more progressive as they scrapped this legislation back in 1988 when rent control ended.

Anonymous said...

Barney from Newington said...
A reservation fee is currently only a small amount e.g. £200 so it is quite simple if you have a deposit of £1,000 to reserve five properties using your deposit.


So where does the tenant get the extra £800 for the deposit required before getting the keys to the property? I can't imagine a letting agent being prepared to wait whilst a tenant tries to retrieve it from the other 4 disgruntled agencies. This at a time when the tenant has to come up with a months rent in advance plus other moving costs.

It also seems foolish for a tenant to p*ss off potential future letting agents in the hope of chipping a few quid that could have been bargained for at the outset.

If this was happening, letting agents would be squealing about it from the rooftops. Can you can provide a link to these reports 'cos I can't find any.

Burbage- The best thing that's happened in the last fifteen years has been(Tory) Newham's decision to register all private landlords
I think you've got that wrong on a number of levels.

Regards, HB Welcome

space cadet said...

The Scottish Govt has the sense and compassion to realise that premiums charged to tenants are exploitative, and uncalled for. They give the tenants the upper-hand in this marketplace and that's just how it should be.

RG's vitriol might be a little pre-emptive but this blog has been undeniably ground-breaking in content.

Barney from Newington said...

I think you over estimate the affect that the ban on premiums will have on the rental market in Scotland.

Unlike the public sector the private sector won't just roll over and accept the will of the anti landlord lobby.

Where there's a will there's a way and I would bet that a way round the ban is found within three months.

Anonymous said...

Barney from Newington said...
I think you over estimate the affect that the ban on premiums will have on the rental market in Scotland.
Unlike the public sector the private sector won't just roll over and accept the will of the anti landlord lobby.
Where there's a will there's a way and I would bet that a way round the ban is found within three months.


The 'way round it' will be an increase in rents. An additional 5%, leaked in over 12-24 months is my guess.

Good for private landlords letting direct and good for tenants that move frequently.

Not so good for letting agents or long term tenants.

But at least it is clear and upfront rather than being imposed on the whim of an unregulated industry.

Regards, HB Welcome

RenterGirl said...

Anti landlord lobby? Nah - it's a an anti overcharging lobby. And the Scottish laws won't affect landlords, but letting agents, who will - deservedly - go out of business. Landlords and tenants might well speak directly. There is no reason for banning premiums to increase rents. Other than profiteerin.

Barney from Newington said...

HB Welcome

I would be very surprised if this was the case for two reasons:

1 Landlords and letting agents are price takers and can not set the rent. The only way that rent would increase is if landlords left the market and I don't think this will happen unless the sales market picks up.

2 I can't see agent's or landlords waiting 12-24 months to recoup the expense of referencing tenants. The Anti landlord lobby would have you believe the cost of referencing was about £2 but in truth it is about £60.

RG

I don't think that your claim that getting rid of letting agents would make for a better Private Rental Sector would stand up to much scrutiny.

For starters about 20% of landlords live abroad. If you then factor in those who live in the UK but not within twenty miles of their property you would be closer to 80%.

I know you are an idealist but even you must realise that reducing supply of properties available to rent by 80% is not a very good idea.

RenterGirl said...

No overseas landlords, you say? Good. And FYI - there is no anti-landlord lobby, just a pro-registered/fair/controlled landlord lobby. Oh - and an anti letting-agent lobby (very strong round these parts.) And can't manage your bought to let investment property as you're too far away? Sell it. You're more than welcome.

Anonymous said...

Barney,

If we were only talking sixty quid referencing fees we wouldn't be in this position.

The problem was that letting agents built in various 'fees' into their business models to make up between about 5 and 7.5% of their income.
- And that was just the 'reputable' agents. For the cowboys it was wild west time and the sky was the limit.
Private landlords letting direct, generally charge low/no fees so are unaffected, if not better off.

IMO, The worst of the cowboys will pack up and find easier targets to exploit. The 'reputable' agents will (continue to) trim their sails in the short term. They will gradually try to spank landlords to make up for their lost fees, which will leak into the market over the next couple of years in the form of a (guessed) 5% increase above what rents would otherwise have been.

Could be wrong but it seems more likely than your theory that the private sector will find a loophole within the next 3 months.

Regards, HB Welcome.

space cadet said...

It's funny isn't it..

That wonderful sense of entitlement that so many landlords have.. whilst begrudging others (and actively denying them) so much.

Makes me sick really.

RenterGirl said...

It is sickening. apart from so-called 'forced landlords' who struggle, BTL is a business with risk.

space cadet said...

And even some of them forced landlords would do well to just accept a little depreciation and sell up. Yes, I mean it. It would make for an easier life, all round. I'd like a landlord that knows what they're doing... that's the least any tenant deserves. And I don't want to live in a state of constant flux while the LL works out what they're gonna do withe the place !

LLs think us tenants are all so desperate, we don't care. I've always found that insulting. Will they sell it? (cue hundreds of viewings), keep it? (cue conversations like the one I had with the LL on their greedy profit margins), move back in maybe? (yeah, just impose on us at will cos you own it, we won't mind), move their relatives in? (again, we won't mind).. the list of impositions just goes on.

Anonymous said...

Oh dear what a pity never mind

Anonymous said...

Rentagirl : Your Census analysis is incorrect.

The 2011 Census shows a growth in renting from 2001 to 2011.

Lots of people are incorrectly predicting renting is going to continue to grow. This is non-sense.

The golden period for BTL is over. In 2007, banks stopped lending.

Banks will only lend 60% of a property value for rental. The product fees are high. (banks advertise 75%, but they set high criteria and underwritters don't give offers).

On a £300,000 house in London. A Landlord needs £120,000 deposit.

House prices are falling. Whats the point if a Landlord made £5,000 in rent and house prices went down by £12,0000 that year. What about cost of insurance, maintenance, renewal, repair, gas safety or service charge etc...

The in this current market, neither the landlord or tenants are the winners....

MOst tenants too busy looking how much the landlord is making, but forget there is a mortgage the landlord pays. The banks are making the money!

There have been many years, where I have had to put money from my salary to pay for things in my rental property.

Why get into renting?. If I had £120,000 in the bank, I rather buy a Ferrari and enjoy it rather then buy a rental house and have the burden of maintenance etc...

Is the rent adequate compensation on getting someone to give up a dream Ferarri?.

How hard do you have to work to save £120,000?

I don't dispute there will be many people who will want to become Landlords. There is a lot of hype surrounding it. But I rather get out of the sector!