Are we moving to a European renting culture?

Tennants are protected in this country under current legislation. They have security of tenure of up to eight weeks before the courts can evict them. In the UK we have been subject to market forces in nearly all aspects of our lives, rent just beeing one of them. We have a stupid system when we consider people on housing benefits where the LA pay the tennant in arears and allow them to run up rental arears of 8 weeks before any action is taken by them to pay the landlord direct. The landlord must take this loss with little or no recourse against the tennants........... who are usually strapped for cash. To say that landlords put the rents up to whatever is just not true in my experience.

More should be done to protect the landlord from the rougue tennats. These rougues are few and far between but us landlords do fall foul of them every now & then. There will allways be rougue landlords & tennants........... it's human nature. To say that the young cannot afford to get on the housing ladder is simply not true in my neck of the woods [South Wales]. I could go out and buy a 2 bed house that needs upgrading for arround 50 grand and that is within commuting distance of Cardiff with no trouble at all. The trouble is some people want the instant fix. My first house had no CH, needede rewiring, rubbish kitchen and bathroom, it also had minimal floor coverings. It was all I could afford, I did the house up myself and had the electrics and heating done by proffesionals. This I done whilst working full time, doing my degree part time at Bristol Poly and finishing my parrents house off which they recently built.

So get on the housing ladder by getting on the ladder and doing some graft,

It's hardly surprising that we're moving towards more and more property rentals if no greedy bank is prepared to lend money and house prices are grossly inflated, is it?

I agree with Taffs comments, when tennants do not pay there rent I feel as a landlord that I end up burdening the costs of rents or late charges as going through courts will take weeks and can be costly. However once those rouge tennants had gone, rented the house to a family and in the last 4 years I have not increased the rent as I appreciate that the tennants that live there currenty look after the house. What I can't understand is why there are some tenants (By the way I have also been a tennant) who won't look after the place, surely one would think if the place your living renting or owning you would want to make it a place to relax. The house I have rented had been completely done up after the last tennants trashed it. I also think it was stupid for the last government to give housing benefits the rent money to then pay the landlord, with already a shortage if the landlord does not get paid and in turn they need to pay a mortgage then surely your increasing the red tape and costs to ensure housing benefit people pay the rent on time.

It's because banks lent too much that prices are so high. I can't see why them lending more will solve the problem. What will happen is that house prices will come back to historical averages. This will happen quicker if the government keeps its' manky hands out of the economy, so in reality will take longer.

They have to keep the establishment happy.

To suggest capping rents is utterly ridiculous.They are subject to the laws of supply and demand the same as anything else. Why dont they cap the price of petrol, or food? In fact, where I live its a buyers market. So would they suggest a landlords income supplement scheme here? I dont see an exodus of people to Russia, where rents have always been very low. I wonder why not?

I agree with Taff. Go where the economy is appropriate for you. Dont expect Cardiff prices in Westminster.

There used to be strict rent control in the UK. Landlords could not increase rents from 1938 until the Rent Act of 1957. I was a young politician and had to hold public meetings to explain the effects of the new Act. One intention of the Act was to incentivise property owners to let out empty houses. It had some effect, but by the 1980s there were again a lot of empty properties so the Shorthold Tenancy Act (STA) was ennacted.

I believe that although the STA did stimulate an increase in availability, it had some very unfortunate side effects. The first is a sense of insecurity for the tenant because there is a fixed term that entitles the landlord to recover possession at the end. The second is the proliferation of 'Letting Agents', many of whom make an enhanced profit by 'churning'. They discourage landlords from granting longer leases, then charge the tenant renewal fees for each new lease, sometimes every six months. This policy also induces a sense of insecurity in the landlord, who feels they must cling to the agent for fear of incurring a void.

The most outrageous abuse of the STA was the retention of deposits by both landlords and agents. This has now been largely ended by the recent change in the law.

I have believed for some time that we need a new tenancy act, but I think its drafting must try to attain two seemingly opposing objectives. The first is to encourage the maintenance, or even expansion, of the rented sector. The other is to provide more long-term security of tenure for the tenant.

I suggest this is the debate we need.

Background: I lived in Germany for over 10 years,renting , so have personal experience.)

I dont think the uk is moving/(can ever move?) to a rental model as seen in Germany.

The quality and 'bang for your buck' of rental accomodation in Germany is very high (compared to uk) and regulated by a good fair system for all. Im am over 6 foot . UK property is built to min lawful sizes (=doll house sizes even so called spacious luxury properties).

In germany properties are not seen to incease in capital by more than 1-2% per year( if at all ) so never attracted the capital returns drivers that has IMO led (over twenty plus ) years to our current disasterous woes.

Our high house price inflation is a major factor in our credit disaster particularly amongst the young.

Many people in Germany due to social work/life balance do not/rarely change houses/locations due to work-consequently tennancies are also very long & stable. You can do significant enhancements to your rented property, making it 'yours'

In the end paying rent in Germany when I last worked it out is about as equivalent to paying mortgage interest but not tying up Capital. Thus the buy decision was more the emotion of ownership not capital increase.

Some local authority housing depts. are already running around like headless chickens trying to house families who are statutory homeless..There is not , apparantly, sufficient housing available from council and RSL stock. As we all know by now, there are to be deep cuts to social housing budgets,hence the comments of a very senior local government housing officer may be illustrative of what may be in store. I quote: "If we are forced to use private sector landlords to house homeless families we will make it as difficult as possible for these landlords to operate.We do not intend that these parasites will profit from the misfortune of society`s most vulnerable people. Whilst staff in the public sector are losing their jobs we intend to make sure that private landlords do not exploit this situation by making profits from this"

Food for thought indeed.

Capping rents will just drive landlords away. Landlords need to be encouraged to invest their hard earned money into an illiquid asset like a property just so that they can earn modest returns by comparison to other investments. They also have to put up with the downsides of collecting rent, rental agreements, repairs, non payments by tenants, dealing with insurances and other charges. Its hardly worthwhile. Any more regulation will be a disaster as there will then be less properties for rent and tenants will find it even harder to find a place to rent.

This landlord bashing has to stop. I have been a landlord for many years and have always been fair to my Tenants. But, I have had Tenants trying to burn my place down so that they can be evicted and they can secure social housing. If there are going to be regulatios, then they need to be fair to the Tenant as well as The Landlord. A lot of Landlords I know are a small business, and would rather sell up then stay in the market if the regulations became more of a burden . The Margins the Landlord work are minimal and the decline of property value has put a end to that stream of profitability.

It is already tough on Landlords, don't make it harder.

While I agree that demand for the Private Rented Sector (PRS) is steadily building the article makes some very exaggerated claims about soaring rents and suggests rents will 'spiral out of control'. This is simply not backed up by any evidence.

In Scotland Citylets provide the most detailed ongoing analysis of the PRS we have seen the market absorb the additional demand and average rents have remained remarkably stable over the year. Annual rent increases of 1.4% (Q3 2009 to Q3 2010) do not represent 'soaring rents'.

Even the Findaproperty Rental Report Q3 2010 has a hard job talking up the figures which in reality shows undramatic annual UK growth of 2.65% though it highlights the growth since the beginning of 2010 of 5.8%. Worth pointing out that their latest average UK figure of £851 (Sep 2010) is down from the £867 (Sep 2008). Not much of a spiral !!!

We do anticipate stronger rental growth in 2011 because of the ongoing constraints landlords are having expanding their portfolios to meet demand. However, statements that 'landlords can pretty much charge what they want in rent, as there is no rent control or cap on prices' is patently nonsense. The PRS market has been working very effectively during the upheaval of the 'credit crunch' and landlords are well aware that if they charge over the odds their property will not let - the last thing the PRS needs is Government interference on rent levels. It should be encouraging the banks to offer better buy-to-let finance deals for regulated landlords given it is the PRS that is expected to house those that can no longer afford to buy (given the reduction in Social Housing supply)

The remarks of the local housing officer are typical of the attitude to landlords as the most wicked of the wicked. Houses are not free, either they are paid for out of taxation or bought privately. The local council wants to house its tenants "the most unfortunate" (??? who are of course also parasites in their own way, taking and putting nothing in)it should not abuse those who are willing to provide the service. It is quite OK to have regulated rents, in these, the price of the mortgage for the property, the costs of maintenance and the average void period should be taken into account. Believe me, it is not all that cheap ! Those of us who have bought a couple of houses to rent out in our retirement have at least purchased an asset that can be used by others. Why are holders of gold bullion and telecom shares, which do not provide as much benefit to communities, not abused ?? I would also like to point out that a flat can be purchased in Newcastle for 50,000, not a lot if you are working in any kind of job. My parents helped me buy my first house, this is nothing new either. As for Germany, regardless of the rental market, house prices are in most places at least as high as they are here !

It's very tough for Landlords and I've had tenants that tried to stop their housing benefit being paid directly to me so they could keep it, be evicted and have a council house. Infact, every tenant that I had that was on benefits tried to pull one stroke or another. The best tenants I've had were Indian students who paid on time, looked after the house reasonably well and were proud tenants. I tried to stop having benefit claimants now.

The truth is that with all the legal com[pliances and schemes that are going it's very difficult for a landlord to make any profit whatsoever, particularly from benefit claimants. I would rather charge lower rent and have working tenants for whom I become their last landlord when they eventually buy their own house. It's resulted in a better profit model for me.

Stop bashing the landlord and think about the system as a whole ! The Govt. would do better spending money creating jobs and making people responsible.

Anonymous 1

Can you enlighten us as to who you are quoting please? If a local government official (employee?) is making public statements of this nature I believe that his senior management / responsible councilors need to be questioned as to the appropriateness of those comments from a public servant. Public in this context meaning all tax payers , landlords and tenants alike.

And something else ... I have two properties let out to long-term tenants. I have not raised the rent since they moved in 5 years ago, as I appreciate the economic situation. I can truly say that is is great for both sides, everybody is happy. In my own business I have also not raised prices for the same period. There should be the possibility of long term tenancy agreements, but the main obstacle is that BTL mortgage companies insist on your letting on six month shorthold tenancies (in case the property is repossessed, they want to be able to evict the tenant). This just means that notice can be given (two months on the landlord's side, one month on the tenant's side, inequitable in itself !!). However, if the tenancy is running well, and you can pay your mortgage, why would you igve notice ? I think that faster eviction should be available to landlords in the case of abuse to the property. If you overdraw your credit card account the reaction is instantaneous, why are landlords considered as a special category to whom the normal rules of business do not apply? Also please note some of the most ruthless evictors are local councils themselves, they get really annoyed if their tenants don't pay on time, and people evicted from council property really are in a bad situation, as it was probably their last chance of accommodation anyway. The local council housing officer who is badmouthing landlords should bear this in mind.

"However, with house prices rising and mortgage lending tighter than ever...." these two statistics are contradictory. Whilst mortgage lending is at all time lows investment/B2L lending is completely dead so how will that support a rise in property renting?

Essentially house prices are not really rising;

- Halifax last 3 months -2.8% (-3.7% over last 9 months).

- Nationwide last 3 months -1.3%.

I think you will find any renting boom will be temporary (excl. DSS/Social) and only reflects the lag as FTB's save for deposits and wait for the inevitable correction.

Rent, rent, rent.

What value is there in home ownership? Well the ones who own a few of them can rent them out, the less they pay for the homes the more money they make, depending on many factors of course.

We now have 13 sites lined up and are looking for BTL investors who want to buy cheap and pile 'em high while the going is good.

The economy is gathering steam but by the time it feeds back down to the great unwashed who need to borrow to buy the canny ones will be laughing all the way to the bank!!

Couldn't agree more that this, in common with most of your articles on the subject, is very Londen-centric in its viewpoint. Since we started in buy-to-let late 2004 to early 2005 only one of our rents has risen (by £25 pcm) and that's the effect of market supply and demand forces. In that time all the flats have been subject to large increases in management charges and new, expensive, legislation, eg updated fire regs. and asbestos investigations mandatory for even almost newly-built blocks. In addition, all other expenses, especially insurance, have risen dramatically and we have suffered non-payment of rents.

Incidentally, as a holder of a 1st (hons.) from UWE (formerly Bristol Poly.) I am absolutely horrified to note the multiple spelling mistakes in Taff's post. Are there any landlords out there who can spell "tenants"? Did they all go to the same school as the estate agents around here who invariably mis-spell "accommodation"?

Just a short one. It is always noteable how many blog responses property postings get! However, like other other landlords here I would say that it is the LL that need greater protection from the tenants. They feel that paying rent abdicates them from all responsibility to the property. Apart from multiple occupancy yields are still relatively low (prob between 3-5% for resi that isn't in a depressed area) as soon as there is damage, restoration or reparation that can go very quickly. Rental prices are certainly not moving up at greater than the rate of inflation all the other costs are. Responsible private LL's are now going to be filling a void the Government can't and won't, I feel it is time we got some breaks!!

Never buy leasehold!

Also forgot to say that it used to be normal to do as Taff (and we) did - buy a place that was far from one's dream home and live in it and with it as gradual improvements were made over the years, then move up as one's earnings increased with time and career advancement. Central heating and another facilities now considered essential were things we were prepared to manage without as we built our future, rather than see our money go down the drain on rent. Youngsters today seem to expect to walk into a film set property and live party lifestyles. Long-term gain means short-term sacrifice.

Roger Harding: Are you my (ex) brother-in-law, once married to my youngest sister?

Sorry about my spelling mistakes. Never my strong point. I only had a 2/1 from Bristol Poly. If only for my perpetual spelling mistakes and incorrect grammar........ who knows..... perhaps a first for me too; but I am good at maths and have made my first million since graduating.

p.s. Do not touch LHA tenants with a barge pole...... unless they have a good guarantor.

Christopher Harris from Anonymous:

It is a fair point that you make,however, these comments were made to myself during the course of a private conversation.As such they will remain off the record-------tempting though it may be etc etc.

Good thing if the insane home-ownership fetish is smashed in our lifetimes: it has done so much to frustrate entrepreneurial spirit and productive saving since the Tories began the cult of a 'property owning democracy', trying to pull socialism's teeth, in the Fifites.

Germany, in ruins in 1945, resisted the lure of the false security conferred by title deeds and indebtedness; it rebuilt itself without making every young Fritz and Frederica into a home 'owner' with a 90% mortgage. Germans feel richer than we do now, and with reason: they make things the world wants. Mrs T, a petit bourgeois dazzled by the dream, kept the ownership bandwagon rolling when she should have been encouraging the growth of a [i]MIddelstand[/i] like Germany's. Today our middle class seeks security in the public sector, prestige in the professions and wealth by gambling in financial markets, while our Rich Lists are full of foreign incomers.

Let''s change the rules of success.

If FTBs are in their early 40s, they will finish repaying 20/25-year mortgage loans shortly before the time they are due to retire-- at higher ages than in the past. Sounds about right: 20 years at home and in education, 20 renting with time to accumulate a deposit and retirement savings, 20 more to go on preparing for old age while buying a roof over one's head, 20 for the sunset years. 80 is the new 70 in this time of improved life expectancy.

Only snag is that people should be marrying and having more children younger (this assumes no more immigration and withdrawal from all supranational bodies that attack the roots of our survival as a nation and indigenous population, but that goes without saying). Rented housing should be more in houses, not flats, for young families. BTL houses have a bad rep as claimants' slums. Bursting the property bubble should foster more new-build estates of semis and terraces primarily for shorthold renting.

What economists call Affordable Family Foundation should be a priority: not for feckless, fecund aliens on welfare but for the natives who are bled white to turn this country into a charity ward for the mentally and morally underprivileged stranger.

I cannot believe any competent government could not see this day coming - any fool can work out that if you sell off all the social housing and not replace it then open our borders to hundrends of thousands of immigrants and asylum seekers then there wont be enough houses. Even when building more housing is in the pipeline then hundreds of protesters emerge - not in my back yard. Private renting and property managers should be regulated and a rent assessor should be engaged. Problem tenants should be evicted wihtin a week if they dont pay their rent. I personally would not pay someone elses mortgage as rent increases year on year on year, mortgage payments stay pretty much the same and the ratio of what you pay on a mortgage to your salary decreases ove rtime - with rent it increases.

Dear Pendant Landlord

Sorry to disappoint you but I am not your ex brother in law. I have been married to an oldest sister for 44 years. Phew!!

In forty years in the building trade about half of the rented houses that I entered I considered unfit for human habitation or grossly overcrowded and since most people have forgotten about Rachman I think things have got worse.

Buying a house is like buying a machine for a factory with a loan from the bank, over several years it is expected to have paid for itself from the company profits. The BTL mortgage is the equivalent of a loan to buy a capital asset. Dare I suggest that the awful places the builder has visited have been made awful at least in some cases by tenants. Once the tenant has moved in, it is up to them how they live, the landlord cannot interfere. Tenants are, I think, permitted to reduce the rent if there are serious problems with the property. Also as a landlord the inspection visits you can make are limited, as this is considered interference also, this is one of the main worried if you are a landlord. I have experienced tenants who have not reported bathroom leaks etc. until serious damage had been done. Please stop blaming landlords all the time !!!

I let a house to a nurse and her husband, they then insisted on moving another family in with them to share the rent, I asked them repeatedly not to do this, in the end I gave them notice. I have had other cases like this also.

Having been involved in the residential property professional for well over 40 years I have seen so much legislation come and go because legislation distorts the market. If the market is left alone it will find its own level whether it be in rents or open market values.

Food for thought.

From NetRent.co.uk-The implications of the Spending Review for the Private Sector.

"With over 70 pieces of legislation affecting the private rented sector, it is crucial, that the correct paperwork, referencing, deposit handling, and certificates are in place, or Landlords could easily find they are unable to take action against their tenant."

Do we need more laws and regulation?

Over to you Landlords.

To those landlords complaining about their low yields and tight margins, did you not think about this when you bought the property? As a landlord you should expect occasional voids and damage; not all tenants are perfect. If your margins are too tight to deal with them, your business model is wrong and you paid too much for the property. Once again, property prices are too high...

Simple question of democracy. As more renters there will be more votes in tenancy rights.

Imagine a situation where 60+% of population cannot afford a property. They will seek to either open the property market or improve rental conditions.

This is not the 1890's where the plebs didn't have the vote.

Taff:

You have my admiration and envy, not for making a million but for being good at maths. I know the 'maths' brain is quite different from the 'languages' type I have. No personal insult intended - I know and admit I'm a pedant.

Roger: Thanks for replying. Just a coincidence, obviously. But honestly, my brothers-in-law will confirm it's really not the nightmare you appear to think being related to me.

James Buchanan

re Democracy.

Considering what democracy has done to us right now, I cannot help but shudder what democracy is going to do to the private rented sector.

To all thy Landlords.

Be sure thy sin shall findest thou.

Thou stolest and profited from what was intended for thy children.

Thou hast the rare chance, right now, to cash in the impure profits from thy sin, and request thy forgiveness from thy father.

The transition from a decade of unfairness to fairness will not be as swift as would be ideal. We knowest that well.

But thy children deserve the same, if not better, chances thouest did.

With wisdom through thy fathers' suffering, they will be more learned than to inflict the same misery upon their children as you have upon your own flesh.

Thou eat thy own flesh. Thy sinner, thy greed; thy hunger devours thyself, yet still ye not sated.

Thou art concernest with thy pension. Thou ought to be concernest with thy POST-EARTH pension!

Thou Heavenly pension is a different sort of pension altogether.

Thou that hold onto their sinful gains shall find their wealth turn to dust; and further, thouest souls shall come to Sulphur.

Thou hast been forewarned of the storm to come.

Sin cannot be undone, only forgiven.

With love and light unto thou and thy thamily.

Christ Jesus x

I'll have some of what he/she is smoking. Nah, prefer some nice Cabernet.

Thought it might be useful to give you an example of LHA/Homelessness.

Working single man, ages 44, develops problems with his legs, hospital does not resolve the problem

Loses work, gets evicted, because he does not claim benefits.

Charity assist him initially, but now states it has run out of money Gets benefits sorted, but cannot find accommodation(nobody wants him). Then asked by the authorities for "further information"

Form supposedly sent to charity, never arrives.

Benefits cancelled, runs out of money.

Job Centre etc sends him to Charity, his care worker, Charity sends him to Job Centre. Hobbles back and forth on his crutch between the two.

Comes to me for assistance, as part of my Big Society effort I help him. "New" claim started, but further info required, form to be sent to his Charity that does not receive letters. Why could it not be given to him?

No money for food, I spend one hour on the phone to help him arrange a crises loan which he will have to repay out of his £60 odd benefit.

Collects that, advises he is homeless, but no acation taken by anybody

Gets £60 loan for 9 days food.

Pays out £20 for B&B, as he has nowhere to sleep, as the Emergency Housing Services refuse him ANY assistance.

Hope I have earned a place upstairs Christ Jesus.Will keep you informed what happens next

PS Can anybody advise what he should do next?

Christ Jesus is not here to judgeth; Christ Jesus asks thee forgivenesses of the Father.

Life is hard. Look after yourselves, but seek not to take advantage of the impoverished.

Squeal little piggy landlords, squeal.

Nutters of the world unite.

Some say "nutters of the world unite"; some say "the canny ones will be laughing all the way to the bank"...

But those people must remember the feebleness of an earthly wealth when they are but a skull and bones.

They leave a stark and spent future.

They cannot be left in ignorance for their ignorance for what they have done ignorantly.

Christ Jesus x

I have not sinned in order to buy the houses I rent out. But sure enough I have been sinned against by some previous tenants. Odd is it not that the church of England is one of the biggest land owners in the UK. My tenants lease my properties from me for a fixed fee. On these rental profits I pay TAX which in turn goes to help the needy on housing benefits.

And as to when my body is nothing but bones, all my wealth above the IHT threshold will go to my nominated charities. So get real you fools...... by the way I AM religious and I practice what I preach NOT what you preach.

ps Pedant Landlord

Not offended in any way............ just healthy banter...... many thanks.

I have not sinned in order to buy the houses I rent out. But sure enough I have been sinned against by some previous tenants. Odd is it not that the church of England is one of the biggest land owners in the UK. My tenants lease my properties from me for a fixed fee. On these rental profits I pay TAX which in turn goes to help the needy on housing benefits.

And as to when my body is nothing but bones, all my wealth above the IHT threshold will go to my nominated charities. So get real you fools...... by the way I AM religious and I practice what I preach NOT what you preach.

ps Pedant Landlord

Not offended in any way............ just healthy banter...... many thanks.

I have not sinned in order to buy the houses I rent out. But sure enough I have been sinned against by some previous tenants. Odd is it not that the church of England is one of the biggest land owners in the UK. My tenants lease my properties from me for a fixed fee. On these rental profits I pay TAX which in turn goes to help the needy on housing benefits.

And as to when my body is nothing but bones, all my wealth above the IHT threshold will go to my nominated charities. So get real you fools...... by the way I AM religious and I practice what I preach NOT what you preach.

ps Pedant Landlord

Not offended in any way............ just healthy banter...... many thanks.

Just a though but I was researching what structural and demographic changes in society might be expected if there was a wholesale shift to renting. Generally in countries where there is a large rental sector eg Holland and France it seems to come under government control to cap rents. I guess that if we move to a situation like that (as looks likely given that the younger generation are priced out of the market) then we will see downward pressure on rents from governments (in fact we can already see it happening with the coalition).

Pedant landlord, I couldn't help noticing that you spelt London as "Londen" in your first post!! Oops! One has to be so careful!

I was hoping to pick up some tips on becomeing a Landlord. However, all this talk of 'Rouge Tennants' in the first few posts has put me off completely! I am not going to spend my Children's inheritance (Thanks Theo) on another House - only for some Rouges to no doubt go Sony Bravia mad with Red paint. High Plains Drifter?? Shudder!

Becoming!! I'll get my coat! Grr!

Update on my 22.30 piece.

Just had a phone call from Derby City Council Housing, that the invalid is not entitled to housing benefits, for reasons unknown.

As far as I am aware this means he has no deposit on a place to rent, no possibility of renting-no housing benefit.

He has less than £40 on him.

Anybody care to advise him what he should do next?