The Lemon Fool

Lootman wrote:

MrFoolish wrote:On the one hand you say rents will be "rocketing". On the other hand you say landlords will be "getting out". It doesn't really stack up

It makes perfect sense. If landlords are deterred from offering their housing units for long-term rental then, other things being equal, that will reduce supply without lowering demand. The result is higher rents.

But other landlords will be attracted into the business by those higher rental payments. It's swings and roundabouts.

Anyway, with the general affordability crisis, I'd say there's limited scope to put rents up. People simply can't afford it. You can't buck the market.

Call me Mr Sceptical, but when landlords are complaining that rents might go up, I feel this is not really their point of concern.

MrFoolish wrote:

Lootman wrote:It makes perfect sense. If landlords are deterred from offering their housing units for long-term rental then, other things being equal, that will reduce supply without lowering demand. The result is higher rents.

But other landlords will be attracted into the business by those higher rental payments. It's swings and roundabouts.

Anyway, with the general affordability crisis, I'd say there's limited scope to put rents up. People simply can't afford it. You can't buck the market.

Call me Mr Sceptical, but when landlords are complaining that rents might go up, I feel this is not really their point of concern.

I have not been a landlord since 2010, so any view I have on this topic now is purely academic, and based on my prior experience of being a landlord. And it is not at all unusual for the law of unintended consequences to apply with well-meaning laws that purport to "help" tenants. They can end up doing the opposite.

Imagine for a moment that the price of fresh fish in the UK is going up and the government wants to do something about it. Would it make sense to tax fisherman more and restrict where they can fish and for how long? Or would it make more sense to ease regulations and give them tax breaks to incentivise them?

If you really want to see where rents are the highest, take a look at cities that have very strict rent control, like New York City. And some of the behaviours that has led to e.g. ambulance chasing, arson and even murder!

Lootman wrote:Imagine for a moment that the price of fresh fish in the UK is going up and the government wants to do something about it. Would it make sense to tax fisherman more and restrict where they can fish and for how long? Or would it make more sense to ease regulations and give them tax breaks to incentivise them?

Well if you got too liberal with the fishing laws then the fish stocks would be wiped out - so probably not a good example.

I do agree laws can have unintended consequences. And these half-baked measures by the government are not going to fix a fundamentally broken system. There's a lot more that needs doing, but that really would be going off-topic.

MrFoolish wrote:

Lootman wrote:Imagine for a moment that the price of fresh fish in the UK is going up and the government wants to do something about it. Would it make sense to tax fisherman more and restrict where they can fish and for how long? Or would it make more sense to ease regulations and give them tax breaks to incentivise them?

Well if you got too liberal with the fishing laws then the fish stocks would be wiped out - so probably not a good example.

I do agree laws can have unintended consequences. And these half-baked measures by the government are not going to fix a fundamentally broken system. There's a lot more that needs doing, but that really would be going off-topic.

But what aspect of the market is fundamentally broken? Rents are too high and house prices are too high. Reducing the supply of rentals while increasing the supply of houses for sale just moves the boundary and does nothing for supplying increased demand overall which is being driven by immigration.

It is however going to make life complicated for the lending banks as S21 enabled easy repossession and monetisation of house assets. Banks might have problems to get their money back so won’t lend anymore on rentals. While falling house prices, likely in this high interest rate environment, will cause negative equity. Personally I think there is a chance of a highly damaging housing downturn like 1992-6 to have set in by the end of the year caused by the jump in mortgage rates.

Nimrod103 wrote:Personally I think there is a chance of a highly damaging housing downturn like 1992-6 to have set in by the end of the year caused by the jump in mortgage rates.

Damaging to who? Not for young people looking to buy their first house. Not for an older generation happy with where they are. Not for anyone looking to upsize.

BoE

As with most things there will be winners and loosers. It should start to swing more favourable for those hoping to get on the market. Saving rates are improving not discounting the effects of inflation.

As mortgage rates increase, the rise in house prices should ease.

Those in the older generation might be happy that their house won't tip them into IHT. In fact a fall in house prices might be welcome.

I suspect that all these changes will leave renters actually worse off. Landlords are now seen in an unfavourable light. All are fat cats with hundreds of tenants living in slum accommodation with mold on the walls. Outside the media we know different. The are good and bad versions of both landlords and tenants.

I suspect rents will rise and availability will be poorer. Some forced out of letting by ever increased regulation. In some ways it will mirror childcare. We all want the best available, run by highly qualified staff not a group of well meaning mums but it has to be affordable! The first two prevent the latter.

I don't know how this can be resolved when demand outstrips availability and looks like this trend will continue. Yes we can keep building but then when all the parks and fields are gone, then what? Hong kong style living?

Private landlords are being forced out leaving "professional landlords" Some of these don't have good track records just ask those living in military accommodation or Rochdale Boroughwide Housing.

Good luck in finding a good balance between the two.

Nimrod103 wrote:

scrumpyjack wrote:
I agree, these 'reforms' are utterly stupid, and it's not as if the tenants are going to vote conservative anyway. Gove must be off his rocker.

I see many similarities between Gove and David Willetts, the politician who persuaded Margaret Thatcher that his idea for a Poll Tax was a winner.

I can only assume Gove thinks that shutting down the 'rental market' will flood the 'houses/flats for sale market', thus bringing prices down. This would then appeal to his target cohort of young aspirational home buyers. But the implications for society in general, trying to absorb the Tory Party's 1 million new immigrants/year, are going to be highly disruptive, or even devastating.

We have had this( Or very similar) in Scotland for a few years now, not sure it has really created that much real, genuine, angst, the main issue we face is more the spread of short term letting in say Edinburgh impacting longer term letting supply and that is now being countered with planning restrictions on these (I have a degree of sympathy, if a B & B has lots of red tape/fire safety etc it levels the playing field if AirBnB's are made to operate within a similar legal/safety framework, though Edinburgh Council appears to have gone totally bonkers rejecting nearly all applications)

Based on my experience, the right (with some qualification) of the tenant to have a pet worries me.

bluedonkey wrote:Based on my experience, the right (with some qualification) of the tenant to have a pet worries me.

It is obviously a big deal to what is probably a vociferous tenant minority. The number of cats & dogs on rescue sites has vastly increased in the last few months - we are looking for a cat - and anecdotally much of this is renters unable to find pet-friendly accommodation.

That said, if I were a landlord I would not accept pets. OK, goldfish...

V8

bluedonkey wrote:Based on my experience, the right (with some qualification) of the tenant to have a pet worries me.

It is going to go with the territory of being a landlord in the future.

One of my tenants is complaining that she isn't being allowed a dog and once this law receives Royal Assent she gets that right. So I am now considering whether to just suck it up or sell the place. There seems to be no other option.

Edit to add: I can imagine this thought process being replicated thousands of times and leading to a further contraction in the total number of rental properties available to the market. And a consequent further jump in rental values, which paradoxically might compensate for the damage to carpets, gardens etc dogs tend to inflict!

88V8 wrote:

bluedonkey wrote:Based on my experience, the right (with some qualification) of the tenant to have a pet worries me.

It is obviously a big deal to what is probably a vociferous tenant minority. The number of cats & dogs on rescue sites has vastly increased in the last few months - we are looking for a cat - and anecdotally much of this is renters unable to find pet-friendly accommodation.

That said, if I were a landlord I would not accept pets. OK, goldfish...

In my landlording days I would accept a pet that lived in a cage or tank/bowl. But not otherwise.

The one argument to accept a tenant with a pet is that those tenants find it harder to find a place and so are willing to pay more rent.

bluedonkey wrote:Based on my experience, the right (with some qualification) of the tenant to have a pet worries me.

I see today's Telegraph has an article on schoolchildren self-identifying as animals.
"Schools let children identify as horses, dinosaurs... and a moon
An extraordinary report from a Sussex school has shed light on the growing trend of pupils insisting on being addressed as animals"
https://www.telegraph.co.uk/news/2023/06/19/school-children-identifying-as-animals-furries/

So when Mr & Mrs Kite want to rent, make sure you know if Henry the Horse is their son or their pet
And is Ms Puddleduck's Jemima a daughter or a cat (or even a duck)

Adrian

Lootman wrote:

88V8 wrote:It is obviously a big deal to what is probably a vociferous tenant minority. The number of cats & dogs on rescue sites has vastly increased in the last few months - we are looking for a cat - and anecdotally much of this is renters unable to find pet-friendly accommodation.

That said, if I were a landlord I would not accept pets. OK, goldfish...

In my landlording days I would accept a pet that lived in a cage or tank/bowl. But not otherwise.

The one argument to accept a tenant with a pet is that those tenants find it harder to find a place and so are willing to pay more rent.

AIUI the bill (as it stands) gives tenants the right to "Ask permission for a pet, such permission not to be unreasonably refused" or words to that effect. The tenant may be required to pay for a mandatory insurance policy to cover any damage to the property. This may well be modified as the bill progresses through the stages in each of the Houses but currently it seems probable that this clause will survive broadly intact.

So landlords not prepared to have pets are going to have to sell up and invest in something other than accommodation. There seems to be no other option.

Mike4 wrote:

Lootman wrote:In my landlording days I would accept a pet that lived in a cage or tank/bowl. But not otherwise.

The one argument to accept a tenant with a pet is that those tenants find it harder to find a place and so are willing to pay more rent.

AIUI the bill (as it stands) gives tenants the right to "Ask permission for a pet, such permission not to be unreasonably refused" or words to that effect. The tenant may be required to pay for a mandatory insurance policy to cover any damage to the property. This may well be modified as the bill progresses through the stages in each of the Houses but currently it seems probable that this clause will survive broadly intact.

So landlords not prepared to have pets are going to have to sell up and invest in something other than accommodation. There seems to be no other option.

I get that but, again, as long as I can ask more rent from such an applicant then I can live with the risk. And maybe an extra pet deposit as well.

Otherwise it is as you say - landlords bail and there are fewer units for rent = higher rents.

Anyway I started to get out of BTLs 20 years ago when I saw the writing on the wall.

For us old guys in BTL, this is certainly going too far the wrong way, and has been tending to for years.

OTOH, I hear anecdotally that younger people are still buying to let - they just accept the new conditions are part of life, whereas we hanker after the days when it was all much easier. There's still money to be made.

From my selfish POV, I'd be more worried about them screwing down on EPC requirements - I'm pretty sure it would be difficult to reach the right category at reasonable cost (if at all), which effectively would force me to sell my flats - flats which are all lived in by renters, bar one owner occupier.

There is nothing here to help landlords with troublesome tenants - I notice the Landlord Redress is for tenants not landlords! We already have an asymmetric system in which landlords are expected to regard their property as someone else's home, but tenants don't treat it as their home seriously enough to lift a finger to keep it in good order by doing the simplest of jobs.

Arb.

Lootman wrote:

88V8 wrote:It is obviously a big deal to what is probably a vociferous tenant minority. The number of cats & dogs on rescue sites has vastly increased in the last few months - we are looking for a cat - and anecdotally much of this is renters unable to find pet-friendly accommodation.

That said, if I were a landlord I would not accept pets. OK, goldfish...

In my landlording days I would accept a pet that lived in a cage or tank/bowl. But not otherwise.

The one argument to accept a tenant with a pet is that those tenants find it harder to find a place and so are willing to pay more rent.

Year ago (late90s) when we did residential letting one of the flats was vacated leaving behind a tarantula in a glass case, I think we called Edinburgh Zoo for advice re its disposal.

Arborbridge wrote:For us old guys in BTL, this is certainly going too far the wrong way, and has been tending to for years.

OTOH, I hear anecdotally that younger people are still buying to let - they just accept the new conditions are part of life, whereas we hanker after the days when it was all much easier. There's still money to be made.

From my selfish POV, I'd be more worried about them screwing down on EPC requirements - I'm pretty sure it would be difficult to reach the right category at reasonable cost (if at all), which effectively would force me to sell my flats - flats which are all lived in by renters, bar one owner occupier.

There is nothing here to help landlords with troublesome tenants - I notice the Landlord Redress is for tenants not landlords! We already have an asymmetric system in which landlords are expected to regard their property as someone else's home, but tenants don't treat it as their home seriously enough to lift a finger to keep it in good order by doing the simplest of jobs.

Arb.

If EPC minimum standard enforcement comes in re residential property why do you think it will only apply to renting properties, it could just as readily apply to sales of property leaving any exit route difficult.

Regarding EPCs I had a look through my own portfolio and none of mine is less than C rated. Most are C actually. The problem the government has with ratcheting up the ratings on rentals is each time they do it, a load of affected properties will be withdrawn from the rental market and sold as their landlords decide its not worth the candle improving them to comply. This effect will amplify the already messed up rental market as fewer houses to rent means even higher rents as supply further constricts.

I say its messed up as already supply of rentals around here has almost dried up. A few weeks ago I was looking for comparables for a rent review and while a few years ago I might have found 10 or 20 on RightMove in the area, the other day for this property there were none similar advertised in the area. And agent I use says they are starving for stock to rent and rents are going stratospheric. She says name your rent, I'll probably get it for you. Anything they put on gets 20 phone calls a day when five years ago it would have been three. This just isn't right and raising the EPC thresholds will turn the screw.

Mike4 wrote:I say its messed up as already supply of rentals around here has almost dried up. A few weeks ago I was looking for comparables for a rent review and while a few years ago I might have found 10 or 20 on RightMove in the area, the other day for this property there were none similar advertised in the area. And agent I use says they are starving for stock to rent and rents are going stratospheric. She says name your rent, I'll probably get it for you. Anything they put on gets 20 phone calls a day when five years ago it would have been three. This just isn't right and raising the EPC thresholds will turn the screw.

Somehow the government never connects the dots here. The more they pass laws "protecting" tenants, the more rents and evictions go up in response.

And rather than recognise and reverse that, they just slap on another set of rules designed to "curb abuse" (or some such) and then the situation gets even worse.

My record for the number of responses to an advert for a single flat for rent was 150! Since that number was unworkable, I simply cancelled the ad, and then re-advertised it at a much higher rent. Problem solved, for me anyway.

Perhaps the government will end up with a ban on no-fault evictions, and rents will be set by a local authority "fair rent officer"? Then we will be back to the 1970s, with all that that implies for rental housing.

However my kids are still keen on expanding their rental ambitions. Having lived through the halcyon days of being a landlord, the 1980s and 1990s, I would not touch it now.