Graham Norwood
Editor of LLT and LAT since January...
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Rent control could be a good measure - if the government can ever see past any excuse to bash landlords. For example, why not make it regulation that rent goes up based on all costs to the landlord, and having a fixed percentage of profit we might otherwise call cashflow? This would end the kind hearted LL's who don't put up rent for 5 years - because it would happen automatically, and would limit profiteering by LL's trying to get market value for their properties where they don't meet market conditions! The banks already have stress tests, which have gone from 125% of the mortgage up to 140%, or what ever it is they decide right now. If the Gov' honoured the bank's wisdom, then it would set a limit for how low a rent can be (call that LHA rates) but should limit increases for existing tenants based on costs to the landlord, and to preserve what ever percentage is left over we call cashflow. This might limit the upper end, but would force the low end up! A lot of social housing LL's would be happy about that.
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I have both PR and STL properties in Scotland. I intend to sell the PRS ones and if the situation worsens for STLs I'll sell them too... There's no way I'd go back to PRS. Well done Scottish government! Give yourselves a pat on the back for the misery you've caused for tenants and landlords. The Airbnb report is spot on, they see it how it is.. I wish we were represented by them as private landlords.
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2.8 million new instructions- who wants some? While preparing a submission for the at the time unannounced CLG inquiry in PRS (CLG only told their friends) I did some number crunching in the hope of adding a positive input into a department that is seemingly bereft of any experience of the Private rented sector and almost allergic to anyone who has. I identified that a 100,000 tenancy provision by private landlords into the assisted tenancy market (pensions and benefits) was worth approaching £1 billion to landlords. One hundred thousand tenancies was a deliberately small percentage ; an easy , appropriately sized sample to make the point rather than a scientifically calculated figure. It represented about 1.4% of the middle ground between PRS and social housing that many agencies and landlords steer clear of. Subsequent research (discussion) shows that about 40% of assisted tenants are no worse at paying their rent than anyone else. Essentially what that means is that there is an additional £28 billion rental opportunity for those prepared to engage the sector. Increasing the PRS provision by up to by 70% is surely a good start in solving the housing crisis. It will obviously put a large rental income in the pocket of those who can afford to buy to rent out, it will put a large commission income in the pockets of those servicing the industry but moreover it will add the incentive to have another 2.8 million private rented sector properties available to ease the housing crisis. Obviously that will leave the remaining 60% of the sector to house but it seems reasonable that government doesn’t attempt to privatise their entire housing obligation, such schemes tend to lead to civil unrest. There will be natural envy at the rich seemingly exploiting the poor, I am not getting into the social ethics of a solution, simply suggesting how a set of government departments could set about solving issues in an industry they don’t properly understand.
Graham Norwood
Editor of LLT and LAT since January...