GENERATION RENT campaigns for professionally managed, secure, decent and affordable private rented homes in sustainable communities.

Join us today and help campaign for a better deal for private renters.

How we help

  • hwh-1.pngCall for changes in legislation, strategies, policies and practices to make private housing a better place to live

  • hwh-2.pngStrengthen the voice of private tenants by developing a national network of private renters and local private renters’ groups
  • hwh-3.pngEncourage private renters to set up local groups in their own areas
  • hwh-4.pngWork with affiliates towards achieving the aims of Generation Rent
  • commented 2015-04-07 15:15:35 +0100
    I’m sorry, Dave, I disagree with much of your logic here, and those with longer term plans merely take property off the market and away from prospective owner occupiers for longer periods of time. The facts are that buy to let landlords will get a mortgage more easily than prospective owner occupiers, based solely on the amount they state they can let the property for. They then buy the property, and potentially let it out to the same prospective buyer who has been turned down for a mortgage on the same house, often for a rent greater than the mortgage repayment would have been. Result – the landlord gets the mortgage paid for him, gets tax allowances as stated, and makes all the profit on the increase in the capital value. OK, there’s a tax implication, but it’s not nearly enough to dissuade landlords from doing this, so would be owner occupiers get squeezed out. Landlords and foreign speculators thus make huge profits, the taxman gets his cut, and the younger generation never have the prospect of owning their own house. The house prices are always rising out of their reach, and the speculators pick up the pieces. If a landlord does overreach himself, he just sells one of his portfolio off, probably to another speculator, writes any loss off against tax, and the circle goes on. Banning all buy to let mortgages stops this vicious circle, allows building societies to have more funds to offer to owner occupiers, and slows the inflationary circle down. If people must speculate with property, let them play with their own cash, not borrowed, in the commercial property market, where firms are more able to pay. When I saw Dan on the BBC News, I assumed this forum might be able to take up such a cause with more public exposure. If this is not the case, I’m wasting my, and everyone else here’s time with my views.
  • commented 2015-04-07 12:28:02 +0100
    I agree that the profits people expect to make from housing is a key part of the problem, but it is surely not right to say landlords are looking to ‘make a quick profit’ when most of them invest for 20 years and provide rented housing. It takes several years before they begin making a profit from rents after paying interest on the loan, and management and maintenance costs.
    The tax regime ensures that letting a property is always less profitable than owner-occupation. Both pay interest on any loan to purchase the property and pay for repairs and maintenance. A landlord benefits from the rent net of management and maintenance costs and growth in the capital value, and pays tax on both. An owner-occuper gains from the benefit of living rent free (which is of similar value to the net rent) and the same capital growth and pays tax on neither. On this basis a first-time buyer should always be able to outbid a landlord.
    It is only cash flow that prevents a first-time buyer from doing so. Earnings and limits on loan-to-value restrict how much they can borrow, and hence how much they can bid for a property. The same applies to all the other buyers with whom they compete in a local housing market. Their choice is between renting and buying, which is heavily distorted by the lack of good options for making a rented property feel like home. Any loosening of restrictions on borrowing either through competition between banks for a larger share of the mortgage market, or through schemes like ‘Help-to-buy’ enables those that qualify to pay more, pushing up prices.
    Supply and demand largely determines rent levels in an area. If there are more potential tenants than properties to let the rents tend to rise. This increases the yield (ie rental income as percentage of procurement cost) attracting more landlords to buy, bringing supply and demand back into balance. Higher property prices depress yield, although prospects for speculative gains can sometimes counter that. For most buy-to-let investors their alternatives are to invest in a pension fund or unit trusts against which they would compare income and capital growth, net of tax. Tax free ISAs can make equity investments more attractive, as can the performance of the stock market. In recent years the stock market has grown less than property prices.
    For landlords cash flow is a question of how long it might take for net rent income to cover their outgoings including mortgage interest, and how deep their pockets are to carry any short or medium term losses before making long term profits. Lenders put tighter limits on loan-to value (currently around 75% with rapidly rising borrowing costs above that), and require a certain amount of ‘interest-cover’ which is the the annual gross rent as percentage of interest charges (typically 125% or more). Lower prospects for interest rates in the short and medium term have increased the amount landlords can borrow, and lowered the yields at which a buy-to-let investment looks attractive.
    What can we conclude from this? It is the relationship between rents and values that limits the appetite for buy-to-let, while it is restrictions on borrowing capacity that limit how much first-time buyers will pay. Buy-to-let must have an impact on prices but it is likely to be a lot less than the availability of credit to first-time buyers.
  • commented 2015-04-07 11:26:46 +0100
    The ease with which buy to let landlords can borrow money and then rent to prospective owner occupiers who would have been turned down for a mortgage on the same property is my issue. It is immoral that people looking for a quick profit can do so at the expense of those wanting to buy a property to live in. Financial speculation and profiteering should not be allowed in the field of property. Everyone has a basic right to live somewhere – why should greedy landlords profit at the expense of the younger generation?
  • commented 2015-04-07 09:12:34 +0100
    Dave Treanor makes perfect sense in previous post. I will read his book.
  • commented 2015-04-07 08:55:49 +0100
    Rented housing is taxed more heavily than owner-occupation. This is seen as falling on landlords but all has to be paid for from rents. Until the sixties home-owners paid tax on the benefit of living rent free (imputed rental income net of mortgage interest) under Schedule “A”, so that the income tax paid on rented housing was more or less the same as on home-ownership. When capital gains tax was introduced owner-occupiers were exempted. You can trace the beginnings of the massive growth in house prices back to the introduction of these two big tax subsidies to owner-occupation. According to the OECD taxation bias in favour of home-ownership benefits those that already own properties (by raising their value) at the expense of those seeking to buy. It does not help affordability. This is a big subject, which cannot be addressed in a short paragraph like this. Which is why I wrote ‘Housing policies in Europe’ comparing the way rental and home-ownership is treated in ten countries across Europe to try to understand why we have one of the least stable housing markets in Europe (after Spain and Ireland). You can download a copy free from http://www.m3h.co.uk/publications
  • commented 2015-04-07 07:19:46 +0100
    As a landlord I am getting tax breaks not available to owner occupiers. If someone borrows £100k to buy a house he will legally claim all the interest paid against tax due on rental income. While someone borrowing £100k to buy a home for himself will have no rent against which tax deductions can be claimed. This inconsistency may be justified on the basis that the landlord is engaging in entrepreneurial activity, but I am not convinced that being a landlord fully qualifies as such.
    There was a time when this sort of entrepreneurial activity was treated differently. I seem to remember higher rates of taxes on “unearned income” in the 1970s.
    Or, more radically, we can question whether any interest payments of any type should be tax deductable, but that may be a step too far. It has always been like this, hasn’t it?

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Housing White Paper: Our immediate reaction

Commenting on the Housing White Paper, Dan Wilson Craw, Director of Generation Rent, said:

“Sajid Javid has the right analysis about the plight of renters, but his White Paper has failed to offer us anything of substance.

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Removing criminals from the housing market

Although the 2016 Housing and Planning Act paved the way for the mass sell-off of council houses, eroded security for social tenants and watered down the affordability of new homes, it also made it possible to ban criminals from letting out properties, with new Banning Orders. 

As we await the Housing White Paper to see how far the government will go to improve private renting further - and how much it will atone for the damage it caused to social housing - we are drafting our feedback on how Banning Orders will work. 

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Are landlord incentives the answer to tenant insecurity?

Today's Observer declares that the "home-owning democracy", that elusive vision beloved of the Conservatives since Thatcher, is finished. 

Obs_0502.jpg 

Ahead of next week's Housing White Paper, Communities Secretary Sajid Javid says, "We understand people are living longer in private rented accommodation", which is the closest the government has come to admitting that their policies to help first-time buyers can only go so far. 

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Housing White Paper: could Starter Homes be genuinely affordable?

As the publication date for the government's Housing White Paper approaches, we and groups across the the housing world are hoping for an announcement that will signal a 'whole new mindset', as the Secretary of State has promised.

One item that will be included is confirmation of how the government's long-running Starter Homes policy will work - and the detail will tell us how far it will go towards slowing the affordability crisis for first-time buyers. This is the government's flagship policy that was pitched as "turning Generation Rent into Generation Buy".

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Are banks behind your latest rent rise?

This morning, Mortgage Strategy magazine and the Daily Telegraph reported that Santander is requiring its buy-to-let borrowers to raise the rent on their tenants as high as possible.

The bank even demands that landlords get a valuation of the market rent every time the tenancy is up for renewal and then "take all steps to ensure that the review [with the tenant] takes place and leads to the maximum increase in the rent which can reasonably be achieved."

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Fuel poverty update: we can’t have any more delays in supporting renters in the coldest homes

Just before Christmas, as the weather got colder and government released its latest update on the fuel poverty statistics, there was still no news for private renters who need clarity about the detail of minimum energy efficiency standards in the PRS.

The statistics showed that one in five private rented households are officially fuel poor, and that the average ‘fuel poverty gap’ – the amount of money needed for a household to escape fuel poverty – is highest for private renters.

Despite these worrying trends, there is, in theory at least, some light at the end of the tunnel – but delays in implementing the policy need to be quickly remedied for that to be realised.

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Help lead Generation Rent - apply to join the board

Generation Rent would be nothing without the people who donate their money or time to the cause. We have a team of two full-time staff going into 2017, and we are ever more reliant on the generosity of our supporters.

The organisation is governed by a board of unpaid trustees, who support the team and enable us to devote as much of our energy to campaigning for renters' rights and building the wider movement.

With the need to develop the diversity of our funding, and new opportunities to make the most of, we are recruiting several new trustees who will help us do this.

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Changes at Generation Rent

Since its launch, Generation Rent has achieved a series of improvements to the lives of renters, including:

  • Outlawing of revenge evictions
  • Making landlords pay their fair share of tax
  • Stronger regulation of landlords and letting agents
  • A proposed ban on letting fees 

The growing renter population finally has a voice, but it needs to be much stronger.

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Build-to-Rent: A new vision for London housing, but who is it for?

For many years, debates around housing supply have suggested that a model needs to be worked up that leverages investment into building new long-term, professionally managed privately rented accommodation, as is much more normal in other countries around the world.

Generation Rent has always argued that new supply will only help a small percentage of lucky renters, and that the priority should be to support legislative reform that would improve things for the over two million London renters in existing stock. 

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Property guardians speak out about Wild West sector

Some of you will have read stories in the past year or two about property guardians. Originally a low cost way of beating extortionate private rental prices, the scheme has been coming under fire for rent hikes, poor living conditions and a lack of regulation.

I run a Facebook-based campaign and support group called Property Guardians UK. Over the past 2 years I have collected stories and information from those who came to my site and provided some with legal advice on problems they had with their agencies. I am also a guardian myself, currently in my 8th year in the scheme.

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