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Farewell Section 21???

Covering Market, Trends, and Practical (but see LEMON-AID for Building & DIY)
JohnB
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Re: Farewell Section 21???

#215892

Postby JohnB » April 18th, 2019, 11:09 am

When I last rented, it was from a chap who was renting out his flat after he moved in with his fiancée. He was a model hands-on landlord, I a model tenant. While it was a 6 month AST, it was extended for 8 months, when he wanted it back because the relationship had failed, so I had to move out 3 months later.

While I was annoyed by the change, I liked having an "accidental" landlord who was committed to my welfare. I'd have not wanted to move after 6 months, or have to deal with an agency. I could see his reason for repossession was genuine.

Flexibility benefited us both. If you remove it landlords are likely to raise rents to cover their increased risks of lack of access to their property, and this chap would have sold rather than rented, so I'd not have had the option.

In China there are introducing trust scores for their people, while I wince at the opportunity for suppressing dissidents, something similar in the rental market could help good tenants find good landlords.

carrie80
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Re: Farewell Section 21???

#215935

Postby carrie80 » April 18th, 2019, 1:12 pm

I'm not a fan of the change, as a renter who has previously been evicted through a section 21 notice. One of the main things I like about renting is the flexibility and I am happy to trade the risk that the landlord may give me 2 months notice (knowing that usually it's in their interest to keep a good tenant in place) for the ability to leave with 1 month notice when I wish. I assume that less flexibility for the landlord is likely to end up in less for the tenant too. I'd also rather be renting from a willing landlord...

On the other hand, I recognize that we are in a privileged position as a white middle class professional couple renting towards the higher end of the market in an area with plenty of rental accommodation. Being evicted was an annoyance to me, but would be a significant hardship for some - and the changes may provide much needed protection for them, even if I don't need it myself.

brightncheerful
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Re: Farewell Section 21???

#216001

Postby brightncheerful » April 18th, 2019, 4:07 pm

I very much doubt this version of events


Perhaps you are too young to remember? :)

I was advising landlords of controlled and regulated tenancies long before the introduction of ASTs. As for paying to be rid of residential tenants, that was a norm for some property dealers.

As far as I know, the concept of a buy-to-let mortgage was introduced by the Property Owners building society. That soc was acquired by the Woolwich Equitable Building Society in 1986; the Woolwich subsequently by Barclays Bank.

Lootman
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Re: Farewell Section 21???

#216016

Postby Lootman » April 18th, 2019, 5:01 pm

JonE wrote:Usually tenants agree to vacate

Yes, I have had over 100 tenants and they have all agreed to leave merely in response to an oral or written request to do so. Only once did I issue a formal notice to quit and in that case the tenant left by the deadline. Most people are very reasonable and understand that an owner has a basic right to regain possession of a housing unit that he owns.

JonE wrote:Assuming you are non-resident in UK for tax purposes, you should investigate the CGT (or equivalent) laws of your country of tax residence as, while still non-resident, you could sell without exposure to UK CGT and, perhaps, with little or no local CGT.

Even if the country of residence would apply CGT in such a situation, one could get around that by moving to an interim country so that you were not resident anywhere at the time of the sale.

There is also the observation that the foreign country you would be leaving would no longer have any jurisdiction over you and probably would know nothing about the sale, so it may well be moot as a practical matter in many cases.

onthemove
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Re: Farewell Section 21???

#216200

Postby onthemove » April 19th, 2019, 1:26 pm

carrie80 wrote:... I am happy to trade the risk that the landlord may give me 2 months notice (knowing that usually it's in their interest to keep a good tenant in place) for the ability to leave with 1 month notice when I wish. I assume that less flexibility for the landlord is likely to end up in less for the tenant too.


I don't see why that should be a given.

In fact far from it - the tenant / 'landlord' relationship is very far from equal.

I think they way legislation is going is absolutely in the right direction - namely it is now moving to recognise that a modern day 'landlord' is simply a business providing a service - not the old suggested by name someone dictatorially 'lording' over the peasants who should be pleased with any scrap the lord might throw in their direction.

And like all business providing a service to society, the rules for the operation of that business need to reflect the needs of the society it is serving.

Business is there to serve society, not the other way around.

So when it comes to tenancy durations, the business of rental housing provision (we really shouldn't still be using the feudal system terms like 'landlord' to refer to the business of housing provision in modern day society) is about providing people with homes.

For the people renting a home, it is their life. The location is where they are rooted. Their neighbours are their friends.

For someone in the middle of their life (metaphorically, not literally by age), suddenly having to move out of the blue can be a substantial burden.

People fall ill, often with serious illnesses which necessitate serious lengthy treatment. People study and train and take exams, during which period a forced move can have a significantly adverse effect of the outcome of those studies.

When we are talking about houses, we aren't talking about a fridge freezer. If you get a section 21 - a housing equivalent of your fridge breaking down - you can't pop round to the shops / online and order a new one and have it installed in a few days.

A section 21 forces a complete uprooting. It means completely tearing your life apart. It means spending hundreds of pounds on removal trucks. Huge effort on shifting all your belongings from one place to another. Assuming you have managed to find another place at short notice - it ain't enough time to properly hunt a property to buy instead of rent.

The risk of a section 21 in 2 months also means you also strictly speaking can't take advantage of 12 month contracts on utility supply and so on. Because you don't know that you will even still be in the property in 2 months - it's outside your control - so you can't enter into a contract on the presumption that you will still be there.

But from a business point of view, a tenant moving out is just a minor administrative issue.

Being in the provision of homes (a modern day 'landlord'), is only really justifiable where there are efficiencies that provide value over being a home owner.

Morally, society will not accept in the long run a situation where a limited supply of stock is bought out by the wealthy few, and then profited out to those with less wealth - unless it can be shown that the business adds value.

Businesses only have a right to exist where they add value over and above the alternatives.

Where I'm going with that - well, in the provision of housing, the only real way to add any substantial value to renting compared to ownership, is through the economies of scale, and expertise through being an expert dedicated to the task - not someone part time doing exactly just what an owner/occupier would do.

And therefore when run as a business with the economies of scale, a tenant moving out is just then one aspect of the business that the business simply has to manage. Like all businesses, they have to live within the realities of the rules which society imposes upon them - rules that are for the benefit of society, not businesses.

This is the reality of rented housing. We have moved away from the feudal system of the landlord / landowner being a wealthy, in effect, dictator who is permitting the peasants to use his land - at a cost to them - and only if it is in his interests...

.. to a modern system which is recognises that housing provision is a necessity of society - renters are members of society for whom the priority is to give a home - not just sources of money, for a landlord to throw out onto the streets with just 8 weeks notice on a whim just because he decides one morning he wants to do something different with the property.

That doesn't preclude the modern day business of housing provision being done for a profit.

Far from it. It could and should still be a very profitable viable business.

But like all modern businesses, the profit needs to come from the value the business adds to society. E.g. through the reduction in maintenance costs through economies of scale, etc.

So it certainly doesn't need to be a charitable endeavor. There's still plenty of justifiable scope for profitability in rental provision.

But it has to be recognised as a business-to-consumer enterprise. And anyone who takes on the modern day role of 'landlord' needs to accept they are taking on a business endeavor. And that as such the relationship is not, by any stretch of the imagination a 1:1...

There's no reason at all why a (consumer) tenant should give a business (landlord) the same notice to leave.

In fact, I don't see any reason at all why a business in the provision of housing should have any right at all to ask a tenant to leave who is otherwise looking after the property and paying the rent.

And to address someone else's comment - no, that doesn't mean the business can't sell the property.

The business has two options - sell with the tenant in place to another business in the provision of housing, or simply wait for the tenant to leave. There's no obligation to install a new tenant when one chooses, of their own free will, to leave (provided they weren't 'pushed' or otherwise 'encourage' to leave by unjustified rent hikes etc).

My current landlord would be unaffected by the above model (i.e. whereby a tenant can't be asked to leave except in the case of fault on their part).

The people who would be affected are those who are not adding value. Those who aren't treating being a 'landlord' as a business providing a service to society. Those who still see themselves like the old feudal 'landlord' who has the right to lord over the people living under their domain, and feel they should have the right to cast out the peasants at their whim. They are the ones who will be affected. They will be the ones who complain.

On the other hand landlords like my current 'landlord' will be unaffected. They are already a business. And as such there is no 'lord' who feels a personal ownership of any of the properties in the business. The owners own the business. The business owns the properties. The owner can sell the business, only the business can sell the properties. That's how businesses (already) work.

And such a business model will be completely agnostic about whether or not they should be allowed to throw out a tenant without fault on the part of the tenant. As others have said - why would a business want to throw out a tenant who paying the rent and otherwise not doing anything of 'fault'?

In a society where there is such a high proportion of rental, and housing costs are so high due to limited demand and inability to simply build more where you like, then a decision to put a property into the rental sector really should need to be viewed as relinquishing direct ownership of the property, into the ownership of a business, from where while you (can) still benefit from being the owner of the business, you no longer have an automatic right to take back direct ownership.

It's basically the same model as regular investment.

When you invest in a company you have the right to all the future residual profits of the company, but you do not have any right at all to the return of your original capital.

And the same 'concept' should apply when moving a house into the rental market.

If a substantial proportion of renters are renting from landlords with just one or two properties, and who really do want the option to have the property back at fairly short notice (2 months is incredibly short), then something is very wrong with housing provision.

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Re: Farewell Section 21???

#216404

Postby berkstunt » April 20th, 2019, 7:08 pm

Is BNC perchance mixing up residential and commercial tenancy law?


Nope, BNC has told it exactly as it was. I was there!

Lootman
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Re: Farewell Section 21???

#216407

Postby Lootman » April 20th, 2019, 7:54 pm

onthemove wrote:from a business point of view, a tenant moving out is just a minor administrative issue.

Being in the provision of homes (a modern day 'landlord'), is only really justifiable where there are efficiencies that provide value over being a home owner.

Ironically your idea of rental housing being provided by "expert" large companies rather than individual landlords is pretty much the way it was before Thatcher. There was not a buy-to-let market at that time. Rather there were companies that owned dozens or hundreds of homes and rented them out. If you were a tenant in the 1960s or 1970s there is a good chance that your landlord was an entity and not a person.

Funny thing is that back then the quality of rental housing was abysmal. The trend towards individual landlords with pride of ownership is what has in many ways tranformed rental housing for the better, and made it much more available.

Now I was a BTL landlord for 32 years. I enjoyed its halcyon days. But even a decade or more ago I saw that the best days of doing it were over, and I gradually sold off my portfolio of housing units. And I am glad I did as even a Tory government has been punishing those who provide homes. Labour would of course be worse.

The real problem with over-regulating rental housing is that it will drive owners out of the market, just like formal rent control is notorious for doing. If as a result landlords stop offering units for longer-term rentals and instead do Airbnb, or short-term corporate, holiday or academic lets, or convert to commercial use or owner-occupation, then the average renter is going to be crowded out. He may be more "protected" but it will be harder to find a place to rent. Just ask people trying to find controlled flats in New York or San Francisco - it's a nightmare for tenants.

And that means only one thing. Higher rents. Be careful about what you wish for.

Hariseldon58
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Re: Farewell Section 21???

#216720

Postby Hariseldon58 » April 23rd, 2019, 12:02 am

@onthemove.
Regarding breaking a 12 month utility contract, my understanding is that there is a statutory duty to let you leave such a contract when moving.

You clearly have strong feelings on the subject, but I strongly suspect that there will be unintended consequences, of the redress of power between landlord and tenant ....

Infrasonic
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Re: Farewell Section 21???

#216834

Postby Infrasonic » April 23rd, 2019, 2:47 pm

I've been on both sides of this argument as a renter on an 'assured tenancy' who got incorrectly served a Section 21, sat it out and eventually got paid a decent sum to move (having read up at the library on all the relevant legislation, made notes and then got a property solicitor to check it over for me for a half hour 'special rate').

As a LL I am currently selling a house (to the current tenants...) that I've been renting out for the last five years via an agent.
I've just negotiated their tenant buyout fee down by 75% with the threat of legal action for multiple breaches of contract by the agent (my advice is DIY as an agent just seems to create more work for the LL and then charges an arm and a leg for privilege...).
Luckily I did everything by email or follow up emails to phone calls once I figured out the agent was lazy and that I might need the legal threat leverage evidence further down the line.

I didn't DIY because the property is some distance away from where I live and I rely on public transport being a city centre dweller, and most of the contractors I spoke to said they are all the same when it came to agent competence so not much point in changing. They hated dealing with agents, I ended up dealing with the contractors direct once I got a few reliable ones.

I previously had one set of tenants who I needed to get some money from for mold and neglect issues so it ended up going to a TDP/TDS tribunal, which I lost (as most LL's do) despite lots of photographic before and after evidence. Chocolate teapot IMHO. I did previously threaten a section 13 rent increase to try and wake them up but as pointed out upthread that is a very limited stick these days.

MSE had an 80%+ in favour of tenants figure a while ago for tribunal outcomes, but with the benefit of hindsight letting the agent handle the whole thing was a mistake as they don't give a s**t really and put the bare minimum of effort in. Mine asked me for my photographic evidence despite their own mid term and outgoing inspection reports having the relevant written and photographic evidence in them (which they initially denied until I challenged them).

As of May the 3rd I shall be an ex-landlord, can't say I'll miss it too much.

I still help a US based friend look after their two adjacent city centre flats (via WhatsApp...) which are a five minute walk away from me, just viewings and a bit of mid term and outgoing inspection kind of stuff. All the gnarly bits are their problem... :D

JohnB
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Re: Farewell Section 21???

#216836

Postby JohnB » April 23rd, 2019, 3:06 pm

@onthemove. Isn't there a danger that businesses obliged to provide accommodation in perpetuity will have similar problems to insurance companies providing annuities, being limited in their options and having to charge more/provide lower returns to cover the risk.

In the same way I don't want to be forced to buy an annuity with my pension pot, I'm not sure as a renter I'd want to only deal with business landlords.

Infrasonic
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Re: Farewell Section 21???

#216849

Postby Infrasonic » April 23rd, 2019, 4:01 pm

Section 8's...

There was recently a discretionary Section 8 eviction in my flat development (luckily nowhere near my flat), which had been going on for well over a year, involving the managing agents, the police (threats were made), social services, the council et al.
There was a child involved who I'm pretty sure has special needs (he's constantly crying/screaming) but hasn't reached the requisite age to get assessed properly, so I didn't think there was any chance of a discretionary Section 8 being granted by the courts as they are notoriously hard to get (even with no kids involved).
I think what swung it was the police involvement over the intimidation aspects, but I'm going off of anecdotal evidence there as I wasn't involved in it apart from trying to calm down the main complainant via IM who lost the plot somewhat (understandably under the circumstances).

Airbnb...

My development freeholders are currently taking legal action against at least one leaseholder (with multiple flats) for this. Again this has been a very long ongoing process. Again the police have been out more than once.
So if you aren't a freeholder and are a leaseholder on say a flat(s) be careful with the airbnb route as although the initial cash flow seems great there are loads of issues with it (buildings insurance et al), not least the fact that properties are being trashed by 'guests' even when strict 'no parties' rules are in place.


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