Coventry View

A litigation lawyer's perspective

A Plague on All Your Houses?

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There is a General Election tomorrow, as you may have noticed. I have ignored it so far, and generally leave party politics alone on this site, as that’s not what it’s for. However, I can’t help but comment on the policies on housing and landlord-and-tenant from the main parties.

Conservatives

We know most about them because it is basically going to be more of the same. Exactly how much “more” and “same” isn’t so clear and will depend on post-election haggling, and who gets what jobs in a new administration. Chris Grayling, say, in Housing would put a different stamp on things to the current (forgettable) minister.

The big story is extending the right-to-buy to social housing properties. There was a lot of outrage initially as it was thought this might devastate social housing stock, but looking at things a bit further shows that the vast majority of social housing tenants won’t be able to afford to take up any right to buy, even at a hefty discount. And even if they do, and sell up and move out, the property will still be there, and no doubt will be let or sub-let to somebody else, so will remain in use. Whether it is sensible to subsidise what will be the wealthier social housing tenants, and make it much more difficult to manage social housing stock, which is inadequate as it is, are questions I will leave to you.

And further austerity may mean a reduction in Housing Benefit, or its Universal Benefit successor which will make it harder for the worse off to pay rents, which won’t help them or their landlords. While the Bedroom Tax will presumably stay, with all the problems that this causes.

However, supply of rentable properties will remain high, compared to the alternatives. So a mixed picture.

Labour

The headline propsal is 3-year tenancy agreements, with rent increases capped at inflation for 3 years. This must be a good thing for the majority of tenants and landlords, as stability helps them both in the short term. A good tenant wants to stay put in the community and will take more care of a property they can be sure of staying in, and a landlord wants to avoid frequent changes, voids and all that hassle. Whether it will work in the longer term is more doubtful. Until the Conservative reforms allowing unrestricted rents and easy repossession under s21 Housing Act 1986 the private rental market was moribund. Will it go there again? And will it be politically possible to remove rent control after the time is up? Or stop further restrictions in the future.

And what about bad tenants? Often a landlord will use s21 to remove a tenant who is in rent arrears or guilty of antisocial behaviour becuase it removes the possibility or argument in court. This opportunity will go for the 3 year term. Will landlords want to take the risk? They are likely to raise rents initially if they will be frozen later on.

Other proposals on registering letting agents and (possibly) landlords will be generally supported, althought the devil will be in the detail. And the Bedroom Tax will go, which helps both the poorest and the social housing landlords who house them. So again, a mixed picture.

SNP

Not a likely government, but a very likely ally if not a partner. And they have much more radical views on housing. In Scotland they are abolishing s21, so tenants can stay in properties indefinately as long as they pay the rent. Forecasts of a reduction of 40% in private letting as a result, as landlords get out while they can, are probably exaggerated, but there is likely to be some effect. The Bedroom Tax will also go, and they are probably keen on registering landlords, so the effect will be Labour on steroids.

Lib Dems

Their policies include most of the Labour ones, watered down a bit, plus rent-to-buy and help-to-rent proposals involving assistance in raising the deposit for first-timers. How far their proposals will see the light of day in any deal is difficult to foresee. But another choice on the form.

Conclusion

It’s your decision. But you may see my view in the comments above.

There is a much more detailed look at this sort of thing on the Nearly Legal website here.

Note – The title is a slight misquote from Romeo & Juliet.

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Written by Coventry Man

06/05/2015 at 13:07

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