Whenever you propose reform of private renting, the landlord lobby always says no, because "landlords couldn't afford it". Whether it's asking landlords to cover the cost of letting agent fees, to apply for a licence, to charge controlled rents, or to pay tax on their loans, we're asked to believe that they can't afford it. Then they threaten to raise rents - as if rents haven't already been outpacing inflation since the end of the recession.
This claim assumes that landlords are already paying large amounts of their revenue out again in costs. Some of them are, but we point out that the majority are not, because they don't have a mortgage.
For example, an interest-only mortgage of £150,000 at 4% costs £6000 a year. Rent on the £200,000 property bought with that mortgage might get you £10,000. Two thirds of private rented properties have no mortgage, and thus have significantly lower costs and capacity to absorb new regulatory requirements.Read more
Today we have called on the Mayor of London to adopt a set of policies that will speed up his efforts to end the capital’s housing crisis.
To remind him what’s at stake, we have uncovered another startling trend that is hurting the city and its people.
Every year the Office for National Statistics releases figures on internal migration – how many people move from one part of the UK to another – and people are moving out of London at an alarming rate.
As Sadiq Khan announced the membership of his new Homes for Londoners board last week, the private rented sector was conspicuous by its absence. Despite close to one third of Londoners privately renting, the new body has not yet made provision for either tenants’ voices to be heard, nor for a clear focus on the PRS to be part of HfL’s work.Read more
A version of this article appeared on Inside Housing.
Last Tuesday, the Resolution Foundation dominated the headlines and airwaves with its report into levels of home ownership. Using figures from the Labour Force Survey, their big finding was that Greater Manchester saw the biggest fall in owner occupation from its peak at the turn of the century. It was a pattern seen across the north.
It’s no shock that the housing crisis is gripping the whole country. Our analysis of the 2011 census in 2014 found that ownership levels were already dropping in major urban areas. These figures are a bit more up to date.
While London and the South East have the most insane house prices, buying a home anywhere has become more difficult. This is because wages haven’t risen by much, and more people are in insecure employment, so it’s harder to save and to qualify for a mortgage. House prices became uncoupled from wages before the credit crunch, and didn’t revert to affordable levels after it.Read more
If ever there was a case for the reform of private renters' rights it's this.
Residents of Dorchester Court in Herne Hill all rent from the same landlord, Manaquel Ltd. In recent years, the company has tried putting up the rent by 30% in many cases - some of the residents managed to negotiate a lower increase, but are still paying much more than before.
This year, instead of having their tenancy renewed, the landlord has been issuing them with section 21 eviction notices - giving the tenant 2 months to leave - without giving them a reason or any option to stay.
[photo: Brixton Buzz]Read more
"Generation Buy". Doesn’t quite have the same ring to it. For baby boomers and Generation X, buying a home was taken for granted, and no one calls those cohorts "Generation Buy". But David Cameron seems fond of the phrase and if it means that he’ll stretch every sinew to make it happen, fine.
First time buyer numbers plummeted a decade ago from a peak of 600,000 to 300,000 today, hence the rise of generation rent. Most private renters still want to buy a home, and the government recognises this; George Osborne said before this year’s election that he wants to double the annual number of new home owners.
But the Prime Minister won’t change anything about home ownership with the policy he talked about in his speech to Conservative Party Conference. “Starter homes” are his latest wheeze, following the failure of Help to Buy to revive aspiring home owners’ fortunes. These privately built homes will be sold at a 20% discount to first time buyers. If house prices keep rising at current trends, that means that in 2018, you’ll be able to buy a new-build flat at 2015 prices. Sorry Dave, but I won’t be opening the champagne quite yet.Read more
There's a lot of muttering right now from the landlord lobby that they'll be putting up rents because of changes to the tax regime and expected increases in interest rates.
The threats would sound scarier if rents weren't already going up faster than inflation. The fact is many landlords will use any excuse to put up the rent when they get the chance. Many others value their tenants, and won't.
If you face a rent hike, you don't need to accept it. We've put together a 3 minute video on what to do to avoid paying too much.Read more
Inflation is one of those annoying things that you just have to accept and deal with - the official target is, after all, 2%. But that gives the government no excuse to allow rents to go up the way they have.
Since 1998-99, when the government started collecting data on housing costs in the Family Resources Survey, the Consumer Price Index (CPI), the measure they currently use for inflation, has risen by 38%. In the same period, the median weekly rent (according to the FRS) has gone up by 80%. If rents had just matched inflation, renters would be an average of £30 better off a week.
The government has made a big song and dance about the zero inflation rate - for the first time in years the cost of living isn't rising. But that only applies if you don't have to worry about the rent.
Today the Office for National Statistics published the latest private rental inflation figures, which stand at 2.5% across Great Britain, and 3.8% in London.