Last time we looked at security of tenure issues. Today I am looking at the next part of the manifesto which is on
Everyone knows that the real problem with the housing market is lack of housing. But how can we get more housing built?
One interesting suggestion put forward is to use public land requisitioned by the government to build houses to sell at cost but with covenants prohibiting the owners from renting other than at regulated rents.
This is a bit outside my area of expertise but I quite like the idea. One problem which occurs to me however is enforceability. How do you stop people from renting property out, eg to people not in a position to complain such as illegal immigrants, at a premium?
Here are some suggestions:
- If owners are found renting in excess of the approved rent, any excess should be recoverable from them to be paid into a fund to be managed by the company licensed by the government to run the scheme.
- Tenants to be entitled to reclaim excess rent from this fund, whether or not their landlord had paid into it (tenants claims would trigger action by the fund to recover the money from the landlord). The fund could also be used to pay for further building
- If the owner fails to pay the sum specified into the fund within a defined period of time, their property to be forfeit (on application to the Court) with title reverting back to the organisation licensed by the Government to manage the scheme.
I don’t feel qualified to comment on the next section looking at other proposals to build new housing. However the following section is on
One proposal is effectively a return to fair rents being set by valuation offices. Another is limiting rent increases.
Although I agree that there is a lot of unfairness at present, I have deep reservations about these proposals, particularly in view of the history of rent control in the last century. I would prefer to see the issue tackled in some other way.
Letting agents fees
Our unregulated letting agent industry is a big part of the general housing problem (although the introduction of mandatory membership of redress schemes later this year may ameliorate this).
I agree with the proposal that letting agent fees should be paid by landlords rather than tenants. After all the agent is working for the landlord not the tenant. However one has to be careful about restricting agent fees too much. They have to earn a living and letting agents employ a lot of people.
So there may be a place for an up front fee to be paid by tenants as a surety of good faith, to be offset against the rent if the tenancy goes ahead (when the agent will be entitled to his fee from the landlord) but to be forfeit to the agents (or landlord if there is no agent) if the tenant unreasonably withdraws from the contract.
The tenancy deposit support scheme looks like a good idea to me and would also be a good solution to the problem of the tenant who wants to pay the deposit by installments. This can cause big problems for landlords due to the unacceptable amount of administration incurred by having to re-protect each of the instalments within the 30 day limit.
The rent a room tax break is well overdue for increase and indeed could usefully be reviewed on a regular basis and increased in line with inflation.
The right to buy proposal will probably get a ‘no’ vote from the landlord community but I think that provided it was properly regulated it could work. For example it would have helped the hapless (albeit thick) tenant in my horror story here.
Next time I will be looking at the proposals on Management. See the Generation Rent Manifesto here.
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