Labour’s proposal to introduce indefinite tenancies along the lines in a bid to emulate the German model reveals the party’s “fundamental misunderstanding” of the rental sector, says a leading trade body.
Earlier this week we reported that Shadow Housing Secretary John Healey wanted to commit the party to “revolutionise” the private rental sector with indefinite tenancies which he said would offer more security for tenants and deter rent increases.
However the National Landlords Association has mocked the proposal, saying there are regulations in place to provide renters with secure tenancies.
"Labour's proposal of adopting a German-style approach to private renting shows a fundamental misunderstanding of the market” explains Meera Chindooroy, policy and public affairs manager of the NLA.
“Not only have rents increased dramatically across Germany over the past 10 years, the nature of renting is wholly different. Almost all properties are let unfurnished and tenants are usually responsible for installing basic amenities, such as kitchens, meaning a much longer term investment of their own money” she adds.
"We agree that the process for landlords to regain possession where there is a fault of the tenant is in urgent need of reform.
“However, the English Housing Survey 2018 shows that 90 percent of renters who have moved in the past three years have chosen to do so.
“Removing flexibility from the private rented sector would have a detrimental impact on the economy as tenants are no longer able to seek out opportunities where they arise."
Healey, in a Guardian article last weekend, contended that most renters in Germany were offered indefinite tenancies with landlords able to reclaim possession only under specific circumstances, such as rent arrears of three months or more, antisocial behaviour, or if the landlord wants to use the property for themselves or a relative to live in.
He said rent increases were also controlled within the tenancy with German renters given three months’ notice if they had to leave.
“People shouldn’t be living in fear of losing their homes. The insecurity of renting is a power imbalance at the heart of our broken housing market, where tenants are afraid to report problems in case they are evicted, and families with children are forced to move at short notice” said Healey.
“Many landlords provide decent homes that tenants are happy with, but the Government is allowing rogue landlords to take advantage of good tenants. Renters deserve better.”
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Labour are clueless.. it’s just about winning the votes and the next election they will say anything to achieve it
Pretty sure that is what all politicians do
BTL lenders will surely exit such lending.
The only reason BTL was possible was because lenders could repossess a property easily if required.
Labour policy if they ever win power will cause a massive decline in the PRS.
We would be returning to the days of sitting tenants and rent controls.
This would result in destruction of capital values and would see many LL selling up
Such Labour policy would destroy all the work of BTL since 1997.
LL really need to sell before a possible Labour Govt takes power.
I hopefully will have exited the AST market by then converting to a hoped for lodger strategy which won't be affected by Labour and its bonkers policies
There is total chaos currently and Labour could well win a GE called very soon.
The threat of Labour is dangerous for LL.
I just hope I'm out of the PRS before Labour might get in
' re-aassuringly WORRYING if Labour got anywhere in control of a 'spinning top,' let alone Government !
so its okay for Tenants now to Not pay an Extra Months rent, up from 2 months rent outstanding at present, to 3 MONTHS !
The PRS is not Governments Free Housing provider. !
Unfortunately like it or NOT Councils and Govt DOES use the PRS as a FREE housing provider.
Just add up all the months that LL don't receive contractual rent.
This is billions.
Now transfer those losses to the Govt balance sheet and it it obvious that such regular losses would be noted by Parliament.
But because it is private LL that are effectively privatising these losses with their resources then Govt and Councils aren't bothered.
Using the LL as free housing facility makes sound business sense as far as they are concerned.
They know the general public will not be the slightest bit interested in LL suffering these losses.
Of course when LL react by stating No DSS tenants the Govt gets on its high horse stating that the PRS is discriminating.
Too bloody right we discriminate agsinst DSS tenants who cause billions of £ of rent arrears along with damages to our properties.
Govt wants to have its own way all the time.
Well it is suffering now because many more LL are saying no more to DSS tenants.
LL are fed up with being used as a free resource before a tenant is evicted.
It is in the best interests of Councils to ensure that eviction takes a long time to occur.
During that period Coincils can avoid their housing duty.
So like it or NOT LL are actively used as a FREE housing facility.
Even more annoying is that even with no rent coming in LL are still expected to pay S24 taxes.......................with what!!!!!???
LL need to factor into their business model that every so often they will be used as a free housing facility.
The only way to reduce the level of this free service is to obtain RGI.
Very few tenants qualify for RGI so LL face a massive risk to their income without RGI qualifiable tenants.
Tenants will still stay until evicted but at least RGI should minimise some of the losses.
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