The joy of being a landlord

[Sythe79]

Something I havent seen in the news but I know is happening with my council, the HA's which are all shut for new applicants, are selling of their properties to private owners, and these owners in turn have an arrangement with the council for the council to top up the rent, in return for the properties being let out at LHA rates. I assume (as I didnt ask about this bit at the time) that they are being populated by those on the waiting list. So the tenant is still getting social rent levels, but by a backdoor agreement the council is topping it up to the landlord.

What are you shocked about ? This has been the model for years, officially housing has cost the taxpayer 17-18 billion a year for a while the real figure is probably much higher.

Fun story last year, a local council somewhere in England did a big deal with landlords pretty much all hobbyists, for long term letting agreements to reduce their waiting lists, gave them big kick backs and months of rent up front to secure the deal. Not only have the council had to spend forever chasing up fixing the properties and sorting out the problems, the minute the LHA went up all these landlords were on the phone asking where the extra money was, you signed a long term deal.

The housing model is one big taxpayer funded scam especially at the bottom of the market that needs fixing

 

[JonRGV250]

the only viable way this is happening is state backed(owned). Anything else is kicking the can down the road.

That’s fairly unlikely to happen though is it?

 

[chrcoluk]

What are you shocked about ? This has been the model for years, officially housing has cost the taxpayer 17-18 billion a year for a while the real figure is probably much higher.

Fun story last year, a local council somewhere in England did a big deal with landlords pretty much all hobbyists, for long term letting agreements to reduce their waiting lists, gave them big kick backs and months of rent up front to secure the deal. Not only have the council had to spend forever chasing up fixing the properties and sorting out the problems, the minute the LHA went up all these landlords were on the phone asking where the extra money was, you signed a long term deal.

The housing model is one big taxpayer funded scam especially at the bottom of the market that needs fixing

Well I didnt know until I was told.

But this is one reason I have concerns about devolution on housing matters like rent controls as councils already have working arrangements with landlords.

 

[Mercenary Keyboard Warrior]

Fundamentally we need a labour supply, we need population growth for economy growth, and we already have a critical housing shortage, so there is no way round it, we need to build a crap ton of houses and and as MKW said the only viable way this is happening is state backed(owned). Anything else is kicking the can down the road.

The other important factor is generally housing is an appreciating asset.
Imagine how the strapped for cash local councils could cope now by selling a tiny fraction of the houses they were forced to sell at a massive discount via right to buy.

Outside the swivel eyed loons getting into power, the chances of a falling population are remote and as such investing in property is a bit of a no brainer.
The source of the capital makes no difference, if it makes sense for an individual, it makes sense for a company, or a country.

Personally I have long thought a national housebuilding bond, working much like premium bonds is the solution.
Rents, and hence returns can be setup based on government borrowing rates, and long term capital appreciation would mean the bonds could be listed as a stock in effect.
Rents would be set to cover ongoing costs as well, so covering building, capital and maintenance.

Well I didnt know until I was told.

But this is one reason I have concerns about devolution on housing matters like rent controls as councils already have working arrangements with landlords.

Generally rent controls are a bad thing. There are plenty of negatives and ways round them, which are played depending on the situation.
The best way to control rents is to make supply a very low level factor in the rent, ie without setting a fair rent level the property will not let.

 

[fez]

Councils have unfortunately had their funding cut to the point they are doing really stupid things like selling off housing stock and essentially gambling with the money they do have in order to try and makes the financials add up. Unsurprisingly, many councils don't have the brightest and best running them and have made some truly awful short term decisions.

 

[JonRGV250]

My parents used to rent one their properties to Norwich council who put some fairly undesirable people in there over the years, and every time they trashed the place (and they did) the council just paid up to have everything replaced.
They had new kitchen’s, bathrooms and even windows.
The last time they replaced everything they just sold up and walked with the money.

 

[chrcoluk]

Generally rent controls are a bad thing. There are plenty of negatives and ways round them, which are played depending on the situation.
The best way to control rents is to make supply a very low level factor in the rent, ie without setting a fair rent level the property will not let.

I would be open to getting S21 ban out of the door, and then seeing what affect that has on the market before jumping into rent controls right away, in the long term I do agree with you though, the proper solution is fixing the supply and type of housing available. Rent controls would only ever be a temporary band aid type measure, which I accept could end up reducing supply.

 

[Sythe79]

Well I didnt know until I was told.

But this is one reason I have concerns about devolution on housing matters like rent controls as councils already have working arrangements with landlords.

In all fairness a bad as councils can be, what other solution is there, even if local authorities could have built housing over the last 20-years why would they when right to buy means after 5 years they would be forced to sell pretty much every home they build at a loss, housing associations have tried to fill the gap and failed, so you're left at the mercy of private landlords dictating pricing.

 

[Mercenary Keyboard Warrior]

I would be open to getting S21 ban out of the door, and then seeing what affect that has on the market before jumping into rent controls right away, in the long term I do agree with you though, the proper solution is fixing the supply and type of housing available. Rent controls would only ever be a temporary band aid type measure, which I accept could end up reducing supply.

The problem is that you have to be really really exact and careful on how the rent controls are implemented.
Eg I saw one about NY where the rent was allowed to be increased based on spending. So a woman had the landlord replace the fridge even though the old one was fine.
That allowed the rent to be increased.
If the rent is flexed based on spending on the flat expect the evaluation to be is it worth spending money to increase the rent, vs is this needed or not.

 

[Rotty]

A 1 year contract automatically converts to a rolling one currently anyway, you don't have to renew, getting rid of section 21 would mean you can't kick them out at the end of 1 year anyway.

The renters reform bill that was due to go through, they were adding e.g. landlord or family wants to live in it as a carve out, aswell as needing to sell, but all labour have said so far is getting rid of S21, not whether they plan to continue with the bill that was already debated or what changes they are going to make.

But then they initially said this would happen on "day one" but now they are repeating some of the same from before the election about the courts not being ready this take everything via section 8.

Thing is, a lot of landlords use S21 for rent arrears (giving up the lost rent) because it's quicker. Using section 8 will make more tenants have ccj's which will then prevent them getting new tenancies or loans so have they really thought that through.

did some research and it seems if the you lived in the property prior to renting out and want to return to make it your primary residence then all is fine and section 8ncovers this

 

[andybird123]

did some research and it seems if the you lived in the property prior to renting out and want to return to make it your primary residence then all is fine and section 8ncovers this

Prior notice required for ground 1​

The landlord must have told the tenant in writing before the start of the tenancy that they might use ground 1. The court has discretion to waive this requirement.
The Court of Appeal held that prior verbal, rather than written, notice was sufficient where the tenant was clear that the landlord might return to live in the property.

So... I didn't actually know about this, I know I don't have it in writing but I'm sure I told everyone involved, so I'd probably have to see if my agent would be willing to state they told the tenants this verbally.
Touch wood my tenants are actually pretty ok, but you never know until the chips are down. Its probably a moot point as Labour are now kicking the can down the road on removing S21, but it might leave me with no option other than to quickly S21 them if they don't change S8 in some way prior.

 

[Maple Leaf]

Ironically we just becoming more similar to other European countries albeit slowly, the situation in the UK with AST's was ridiculously lopsided, and LL's got used to that system, now a more balanced system seems whacked to them.

Security of tenure over someone else's personal property will always be problematic.

However of course courts need sorting out, as a year is far too long to action a S8.

If Section 21 is scrapped then every time a landlord wants to get back possession of a property it will have to go to the County Court. They already have a huge backlog of cases with just Section 8 etc, so I dread to think what will happen when ALL such cases must go there.

The problem with S21 its just a over powerful piece of legislation that should never have been a thing. History shows if you add a way for people to abuse something, they will do so. Every year, even a single year of extending S21 will cause misery to too many people.

That's a rather one-sided view of it. After the fixed tenancy period is up the landlord has the right to end the tenancy with 2 month's notice (after the upcoming rent day) and the tenant has the right to do so with just 1 month's notice. Therefore, the tenant has more flexibility than the landlord.

Most landlords in the North East rarely use Section 21. I mean why would you if you have good tenants who pay the rent on time, pay the bills, take care of the house/garden, don't upset the neighbours etc? Of course, that London place is a different story and the media/government talk about/draft legislation mostly based on what happens there.

I rented for over 15 years and only received a Section 21 notice once (because the landlord was selling up). If you're receiving them frequently and you're doing nothing wrong then consider moving to a cheaper part of the country where there is not such a massive demand for rental properties that ruthless landlords can dump good tenants and then get new ones who will pay much more.

After living in HMO's for many years I know of several cases where landlords used Section 21 notices to get tenants to change their bad conduct. For example, where a tenant had engaged in anti-social/threatening behaviour to other tenants or owed a lot of money for rent/energy bills etc, then the landlord would issue one but later withdraw it if the tenant changed their ways before the 2 months was up. Once Section 21 is gone the landlord will have no choice but to use Section 8 etc to get rid of the problem tenant and won't be able to give them a second chance.

 

[Rotty]

Prior notice required for ground 1​

The landlord must have told the tenant in writing before the start of the tenancy that they might use ground 1. The court has discretion to waive this requirement.
The Court of Appeal held that prior verbal, rather than written, notice was sufficient where the tenant was clear that the landlord might return to live in the property.

So... I didn't actually know about this, I know I don't have it in writing but I'm sure I told everyone involved, so I'd probably have to see if my agent would be willing to state they told the tenants this verbally.
Touch wood my tenants are actually pretty ok, but you never know until the chips are down. Its probably a moot point as Labour are now kicking the can down the road on removing S21, but it might leave me with no option other than to quickly S21 them if they don't change S8 in some way prior.

thanks

 

[mattx4]

did some research and it seems if the you lived in the property prior to renting out and want to return to make it your primary residence then all is fine and section 8ncovers this

One thing to remember as well is even if it goes back to your primary residence when it comes to selling you will owe capital gains for the time it was a rental property. eg you live in it for 5 years rent it for 5 years you owe 50% of the capital gains tax on it

 

[Rotty]

One thing to remember as well is even if it goes back to your primary residence when it comes to selling you will owe capital gains for the time it was a rental property. eg you live in it for 5 years rent it for 5 years you owe 50% of the capital gains tax on it

no intention of selling at any point in foreseeable

 

[EvilRob]

One thing to remember as well is even if it goes back to your primary residence when it comes to selling you will owe capital gains for the time it was a rental property. eg you live in it for 5 years rent it for 5 years you owe 50% of the capital gains tax on it

You get additional PRR for the last 9 months even if you didn't live there.

 

[chrcoluk]

Security of tenure over someone else's personal property will always be problematic.

If Section 21 is scrapped then every time a landlord wants to get back possession of a property it will have to go to the County Court. They already have a huge backlog of cases with just Section 8 etc, so I dread to think what will happen when ALL such cases must go there.

That's a rather one-sided view of it. After the fixed tenancy period is up the landlord has the right to end the tenancy with 2 month's notice (after the upcoming rent day) and the tenant has the right to do so with just 1 month's notice. Therefore, the tenant has more flexibility than the landlord.

Section 21 not only gets abused, but it actually doesnt work well with other rental regulation , S13 is the most obvious one, where by we have a rent dispute system, but the landlord can simply choose to not take part by issuing a S21.

Its fairly simple to setup a new system for streamlined property repossession for purposes of things like selling or moving back in, that will be setup, that system would prevent using it to evict someone only to replace them with another tenant.

If you think there is nothing wrong with a landlord to remove a tenant thats done nothing wrong, to only then immediately replace them with another that conveniently is paying much more rent, ignoring mould or other safety issues, then I will disagree with you on that one.

 

[andybird123]

If you think there is nothing wrong with a landlord to remove a tenant thats done nothing wrong, to only then immediately replace them with another that conveniently is paying much more rent, ignoring mould or other safety issues, then I will disagree with you on that one.

Yes it is wrong, however; Getting rid of S21 in order to prevent landlords putting up prices will be of limited benefit - if the LL can get someone in on a higher rent that quickly that its worth contending with a void period, then they can easily go via the Form4/S13 route, the LL would win at rent review and then the tenant would be in arrears if they don't pay the new rent. A S8 for rent arrears gives them a CCJ which is worse for the tenant, the tenant does get the best part of a year of the lower rent by just being in arrears (or if you are in arrears anyway then just stop paying the rent entirely) but then could be left unable to rent at all with a CCJ for rent arrears, meanwhile the LL gets fed up and sells the property meaning less property to rent and the prices go even higher.

If rentals are scarce then prices will keep going up, getting rid of S21 entirely doesn't solve that, if anything it makes the problem worse. Just getting rid of S21 without replacing it with something else, fixing the courts, amending S8 etc. would see a mass exodus of LL's, it would be a bloodbath for tenants.

Substandard properties should be prosecuted/fined by local authority, the fact that is often isn't still isn't solved by changing legislation - things like registration for LL's increases costs for LL's which increases prices for tenants, and if the enforcement isn't there then the bad ones still get away with it anyway. New legislation forced on good LL's doesn't fix the issue of poor enforcement against the bad ones.

Since when has the government setting up any system ever been "simple"? (And I say that as someone who used to be a software dev for HMRC)

 

[Maple Leaf]

Section 21 not only gets abused, but it actually doesnt work well with other rental regulation , S13 is the most obvious one, where by we have a rent dispute system, but the landlord can simply choose to not take part by issuing a S21.

It's not good business to fail to negotiate with a current tenant if you need to increase their rent. Getting in a new tenant carries significant costs (paperwork/background check/credit check/deposit protection etc), so if you have a good sitting tenant who is prepared to pay the market rent rate and is otherwise suitable then most landlords (in places with a normal housing market) try to hold on to them and negotiate on the future rent levels.

If you think there is nothing wrong with a landlord to remove a tenant thats done nothing wrong, to only then immediately replace them with another that conveniently is paying much more rent, ignoring mould or other safety issues, then I will disagree with you on that one.

I have never heard of a landlord doing what you describe round here and I know several of them. I would not do it. But since small landlords are increasingly being forced out and replaced by corporate landlords I suspect that ruthless rental increases and other sharp practices will become more commonplace.

What no one talks about in these conversations about tenants' rights are all the poor tenants who (just about) keep up to date with their rent and other bills but damage the property through neglect and carelessness then blame the landlord. For example, it's all very well going on about black mould, but I've had tenants who caused black mould in perfectly safe properties (which I lived in for years without that problem) because they failed to ever ventilate bedrooms, or use the automated dehumidifiers (which I provided) or left rice cookers going there every day without any ventilation etc. Landlords cannot get rid of tenants who let the properties deteriorate through neglect (because the tenant just blames the landlord for the issue and Judges are inclined to believe them), so Section 21 is often also used to ditch tenants like that.

 

[chrcoluk]

Yes it is wrong, however; Getting rid of S21 in order to prevent landlords putting up prices will be of limited benefit - if the LL can get someone in on a higher rent that quickly that its worth contending with a void period, then they can easily go via the Form4/S13 route, the LL would win at rent review and then the tenant would be in arrears if they don't pay the new rent. A S8 for rent arrears gives them a CCJ which is worse for the tenant, the tenant does get the best part of a year of the lower rent by just being in arrears (or if you are in arrears anyway then just stop paying the rent entirely) but then could be left unable to rent at all with a CCJ for rent arrears, meanwhile the LL gets fed up and sells the property meaning less property to rent and the prices go even higher.

If rentals are scarce then prices will keep going up, getting rid of S21 entirely doesn't solve that, if anything it makes the problem worse. Just getting rid of S21 without replacing it with something else, fixing the courts, amending S8 etc. would see a mass exodus of LL's, it would be a bloodbath for tenants.

Substandard properties should be prosecuted/fined by local authority, the fact that is often isn't still isn't solved by changing legislation - things like registration for LL's increases costs for LL's which increases prices for tenants, and if the enforcement isn't there then the bad ones still get away with it anyway. New legislation forced on good LL's doesn't fix the issue of poor enforcement against the bad ones.

Since when has the government setting up any system ever been "simple"? (And I say that as someone who used to be a software dev for HMRC)

S21 causes all sorts of harm its not limited to rent increases, it is an absolutely hideous piece of legislation.

Why are you so desperate to keep it? There will be something to allow the property to be reclaimed for sale/owner moving back in.

Whats so important that you need to kick out a tenant fault free to replace them?

S21 seems sacred to you.

Also @Maple Leaf thanks for confirming the misuse of S21 to deal with tenants reporting problems.