Rent Controls

The Labour Party wants to introduce rent controls.

The rental market is doing quite well at the moment – three reasons:

  1. Students have fallen out of university into a part of the world where being twenty-something means being a student working fixed hours with settled time off and money, which is a lifestyle that works well with the flexibility (and lack of responsibility for the ultimate state of the main fabric of the property) of renting;
  2. Lots of people have bought more houses than they need and rented them out, taking these houses out of the selling market and renting them to people who would happily have bought them, and then appear in the Metro newspaper on a weekly basis being sanctimonious about how they were allowed to do this ten years ago (unlike some of us, who owing to gratuitous ageism were not allowed to engage in the real estate market ten years ago – for which I have just decided to sue, not sure who);
  3. The remainder of the population, owing to a combination of encouragement of stupid property price increases, a growing enthusiasm for “buy to let” and the Government trying to break the natural downside of the economic cycle, now can’t afford to buy a small cardboard box if it comes with its own freehold.

The correct response of a party wanting to be in Government is to stand on a cardboard box and promise to force a housing crash. In a way, what with the mansion tax and rent controls, this is what Labour is trying to do – although it would help if they said so.

Right – problems:

Three-year tenancies

I don’t want a three-year tenancy. My six-month tenancy becoming a rolling one-month one is fine by me. I can clear off easily should I so wish, should my employer so wish and so on.

Two months’ notice

With one month’s notice I can buy a house without having to give my landlord notice when I start the process (to avoid renting a house I left over a month previously but am still contractually bound to pay for) and without worrying that if I do and the process falls through I’ll still be kicked out after the two months has elapsed. If you work for an employer who wants you to move on at a month’s notice (the average graduate trainee, certain Armed Forces people – I briefly knew an Army-family lad at school who lived out of hotels -, construction workers, etc.) a monthly rolling tenancy is much more flexible. Or indeed if you see something better across town, available to take now or not at all, and want to move to rent there instead.

The landlord, meanwhile, can minimise the time between realising that their tenant is trashing the place and getting them out. Two months is a long time to knowingly have someone going to pot with your property (and does going to pot with it constitute what the BBC says will have to be a “good reason” to evict? – the lawyers will work that out for you). No doubt with suitable effort they can be evicted more promptly, but court orders are tricky things to procure – particularly when your outgoing tenant rolls up at the court and from a gentle cloud reminiscent of a general lack of association with soap points out that they have nowhere else to live.

Not all tenants trash the property, of course – and not all freehold property owners leave the property in perfect condition (some have a funny idea that the central heating being removable with a hacksaw means that it is not included in the sale of the property – why anyone should need to take the house’s central heating with them is a total mystery, but perhaps they didn’t trust the central heating in their new place). While both freehold tenants and landlords are a bit stuffed regarding redress (but perhaps fancied a new central heating system anyway) landlords see a higher turnover of people and are therefore statistically more likely to end up having to spend two months de-potting the house, settling up with the electricity company, etc. And if we aren’t going to work on the basis that we’re working towards a ban on renting then it may be worth encouraging it. Within reason. Or, if not encouraging it, at least encouraging people who let out property to not worry too much about what their tenant may be doing with it.

Rent rise controls

There is an argument that if property prices are going to rise then so should rents. And if the area around a property gets done up then the landlord should feel comfortable doing up the property in the knowledge that this can be recouped from the rent rise without new tenants arguing that this is an unreasonable increase (which they would, because they do when railway companies improve the service and then put up fares by the rate of inflation) or old ones arguing that this is illegal (which it would be).

The simple solution for tenants who don’t want their rent going up is to live in an area which might mildly improve in value if Russia dropped The Bomb on them.

What exactly this means for people who like where they live and would like the landlord to carry out some upgrade work is an interesting question; currently the landlord could theoretically (if any of them do this) do the work and recoup the cost by jacking up the rent – this could be agreed in advance. If the rent is capped at inflation, there is no way of recouping the cost. And the next tenant will point out that the previous tenant got a very nice flat at half the ordinary rental value, and they want the same.

Much as it is very nice to take out a dirt cheap rental on a flat in a hole, watch the hole steadily improve through much polishing, tree planting, park development, etc, end up living somewhere extremely pleasant and then veto the rent increase…

Observations

Critics of this policy “want to defend the status quo” apparently. Well, yes. That’s sort of what saying what we have at the moment is very fine and dandy means. In other news, dog bites man.

This country has less regulation than other countries apparently, which is remarked upon in a way which says that being free to conduct private business without ticking boxes and relying on Government red tape is a bad thing.

The survey into rent caps was carried out by Survation for campaign group Generation Rent – it was found to be very popular. It would be. People like not paying more. Milk prices fixing at £1 for four pints (or 85p for two pints, weirdly) is also very popular, though there are questions about what it’s doing to dairy farmers. The death penalty’s not that unpopular, even these days. So’s renationalising the railways. So’s leaving the EU (Labour’s not so gone on that one). Doesn’t mean it’s a good policy.

Labour say average rents have gone up since 2010 by £1,020 and the BBC says £1,200. Presumably a typo. Labour describes this as per year, whereas the BBC leaves houseowners to panic that the poor little renters are being screwed on a monthly basis. It works out at £85 per month. This was my weekly rent on a room at university. However, that does not mean that someone who was paying for such a room five years ago has faced a 25% rise in their rent bill. My university was in an economically-poor area of the country and consequently towards the bottom-end of the table that £85 is around the middle of. For someone renting a house in London, somewhere around £400 per week seems to be the bottom end of the market at the moment. That’s around £2,000 per month, at which point an additional £85 per month (4.25% over five years) is pocket money (and actually makes the policy completely pointless, since 4.25% is well below overall inflation).

My rent hasn’t actually gone up since I moved here, some while ago (touch wood it stays that way). My next-door neighbour knocked ten quid off her monthly bill when she moved in with no quibble. If landlords can turn round to a request by a potential tenant for a rent cut and say that it’s not worth negotiating because there’s someone behind them in the queue who will pay what’s asked, this can mean one of two things:

  1. There is a severe housing shortage – which will not be rectified by capping rents (but we could kick out Mrs Clegg and Mrs Farage – that would free up two houses and Mr Farage would approve);
  2. The next person in line should grow a spine and also request a rent cut.

I do have to admit at this point that I did not do Point 2, which means I’m paying about a pound less in weekly rent than I was 5 years ago rather than the £3.50 less that I would be paying if I’d done the same as my erstwhile next-door neighbour.

Ultimately if my rent was increased I would hopefully have sufficient presence of mind to ask why, given that natural wear and tear plus a noisy neighbour and few improvements to the immediate neighbourhood (ok, a couple of the more hideous local buildings have been knocked down) means that the place is worth less than it was when I moved in.

I did dislike the large fee I was hit for when I moved in and the fact that it appeared out of the blue (along with the exit charges in advance) gave a rather cowboy air to proceedings. However, I recall that these have already been capped and have to be justified (I moved in before all that). If these fees are passed to the landlord, the landlord will then pass them to the tenant by modifying the rent accordingly. Tenant pays either way, albeit in instalments on the Labour method – and continuously for the life of the tenancy on the Labour method.

What I do find amusing about all of this is learning at university that once upon a time 12-year tenancies had to be registered with the Land Registry, though this has been brought down to 7 years. However, nobody seems to have these mythical 7-year tenancies.

___…___

At the bottom of the Labour Party’s website at the moment is a little pop-up asking if you intend to vote on the 7th of May. It can also be accessed at http://labour.tw/1hsYgZN. It is a nice, friendly Labour affair, very keen on the importance of you handing over your money. Quite reflective of the party really.

After scooping up your personal details (whatever personal details you may happen to have and depending on how many old postcodes you can remember – note that it is not clever enough to distinguish between a random character and an actual email address) we have the question as to what Labour means to you. This is rather one-sided, which is regrettable as it might help the party develop to discover that, what with one thing and another and the odd war having gone wrong and certain 1997 commitments having not happened and so on, certain people regard them as liars. Equally, they might know this already and the question is not compulsory, so we’ll move on.

The second question is what major Labour policy you like. I rather liked the fact that they “saved the world”, as G Brown pointed out in 2008. Unfortunately, they are not proud of this one. Nor are they proud of mass nationalisations, bringing peace and democracy to the Middle East, privatising the Empire or forming a Government of National Unity with the Tories.

Then we have the vague floaty bit which politicians like because its vague and floaty.

The recent losses to my local community is a bit ironic; there are empty shops near my house, but these are because the bookmaker and the pawnbroker have pulled out. My GP was always rather hard to see, particularly under Welsh Labour (leave home coughing and dying at 07:30 for a possibility of being seen sometime before lunch, book the illness two weeks in advance for after lunch or go to A&E), while I thought pub closures were down to the smoking ban that Labour brought in. Anyway, there haven’t been any round here for ages.

The volunteering question does not include heritage railways, which is awkward – and curious, since the Heritage Railway Association is currently led by a Labour ex-MEP. (He is agnostic about mainline steam. This is handy, since if he had an opinion it wouldn’t be very relevant just now.)

Finally we have the question as to how I feel about five more years of Tory government.

Well…

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