Shelter is calling for the introduction of a new renting contract which would last five years.
It says the aim is to give greater stability to the growing numbers of people who rent privately.
In a new report, Shelter – which is conducting research into ‘rip-off’ fees charged by letting agents – says the new Stable Rental Contract should become the norm across the rental market in England.
The charity for the homeless insists that the contract would give tenants more stability to put down roots, and landlords more certainty of a good return on their investment, because rents would be increased in line with inflation each year.
The contract would still allow tenants to evict genuinely bad tenants ‘easily’, says Shelter, allow landlords to end the tenancy if they sell up, and give tenants the ability to terminate the contract with a two-month notice period.
Shelter says its research shows that 35% of renting families worry about their landlord ending their contract before they’re ready to move out, with one describing their experience of renting as ‘walking on eggshells’. One in four renters (28%) don’t think a rented home is a suitable place to bring up children.
Two-thirds (66%) say they’d like the option of staying in their home long-term, but the current average stay in a rented home is just 20 months.
The report draws on research by property firm Jones Lang showing that the Stable Rental Contract could increase landlords return on their property investments. The study used economic modelling to find that, compared with the irregular way that some landlords currently increase rents on their properties, their returns would actually be increased with longer-term tenancies and predictable rent rises in line with inflation.
Shelter says the changes could be introduced immediately within the existing legal framework for private renting in England, without the need for new laws.
However, it is not known what buy-to-let lenders’ views would be on five-year contracts, as the normal insistence is for six-month or one-year Assured Shorthold Tenancies. Nor is it clear how the issue of tenants’ deposits could be handled in the context of a five-year agreement.
Campbell Robb, chief executive of Shelter, said: “With a generation priced out of home ownership, renting is the only choice for growing numbers of people.
“But with the possibility of eviction with just two months’ notice, and constant worries about when the next rent rise will hit, the current rental market isn’t giving people, particularly families, the stability they need to put down roots.
“The Stable Rental Contract offers renters the stability of a five-year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework.
“Turning rented houses into homes should be a priority for everyone who cares about the wellbeing of families in this country, and government must now show the political will to make renting better for millions of people desperate for a stable home they can rely on.
“The Government must pull out all the stops to encourage landlords and letting agents to offer the Stable Rental Contract.
“Last month, ministers set out their plans to commit millions of pounds of public money to underwrite investment in building more rented homes. Insisting that these homes are let using the Stable Rental Contract would be a good place to start.”
But would all tenants welcome a longer rental agreement? See next story.
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Comments
we'll agree to disagree then
whatever the correct figure even havings 350k empty properties in the uk dispells the supply/demand issue then doesn't it
lets face it the uk housing market has been bailed out because had interest rates stayed at historically low 5.75% the prices would have crashed
this would have allowed our kids to partake in society and grow the economy
the reckless have been bailed out and the risk is that this is reversed with higher interest rates
this,IMO ,is usustainable,but even if it continues ala japan prices will drop for 20 years and the renters will leave for pastures new
some central london property will fall 90% imo
The report is here btw
http://www.emptyhomes.com/statistics-2/
what the Empty Homes report actually says is 930,000 'reported' empty but - as I posted earlier - only 350,000 long term empty, the figures generally accepted by the industry for a true representative figure for analysis.
The whole report includes anything the council tax offices see as empty on the day of the report, that includes property that was occupied the day before and is due to be reoccupied the day after but just happens to be empty on the day. Hardly a reliable figure for the purposes you're trying to use it for.
Are you sure you didn't have a hand in Shelter's statistical analysis, dave? lol
well actually I'm posting my opinions on this free internet discussion board
which I believe is its purpose
there is clearly a crisis in housing after the government bailed out the reckless and shafted the prudent all at the expense of the next generation
I think thats something to post about
That site only says "eports suggest that approximately 1 million properties in the UK are empty."
You like they are passing on heresay as fact.
'Send four and sixpence we are going to a dance'
Instead of quoting ignorant crap at us go and find the report.
Shelter claimed last week that 25% of all childrem had been ripped off by letting agents because some can not use a calulator and didn't do stats at school.
Every other numpty then quoted the report as if 100% of people who rent privately could be ripped off 3 times each.
Dave, do you work forr shelter, are you the Annoying Devil from C4 Balls of steel or just a bloke who trawls the internet looking for crap to re-post on here in support of his own FLICK I know everything ideas on every single subject.
http://www.britishinsurance.com/insurance-news/13th-dec---1-mill-empty-homes.aspx
one of many articles with consensus at 1 mill
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Nearly 1 million empty properties in the UK
13th December 2011 - Despite the current housing crisis, reports suggest that approximately 1 million properties in the UK are empty.
There are a staggering 2 million families who lack adequate housing in the UK, while nearly a million are totally empty according to the Empty homes campaign.
there are 1 million empty properties guys and girls
in the uk
Really? where do you get those figures from? According to latest statistics there are only around 350,000 long term empty properties, thats more than 6 months empty, in the UK and fewer than 80% of those are in England. A lot of them will belong to local authorities and housing associations.
try
www.liveleak.com/view?i=fa1_1326698573
says who? I challenge you to find more that two where you live.
I saw this this afternoon and for some reason thought of the whole hpc argument
http://bit.ly/ScWCuu14
there are 1 million empty properties guys and girls
in the uk
hahaha, thats so cruel - like tempting a starving dog inside with a sausage then kicking it back out into the rain hungry.
I don't think dave will accept it based on the simple mathematics of there not being enough houses to meet supply in his 'meltdown', that won't fit in with his view of the future at all, bless him
This shrinking market, is that all the peole who stop renting in order to buy?
Along with the generation you are worried about who will obviously be buying rather than renting otherwise they just replace the ex renters.
So here we have a load of properties sat vacant but by definition more purchasers than properties, Ex renters Plus new generation less them that have died (still an increasing population) gues what is going to happen to prices.
Yay Dave finally gets it! there will be no crash without mass extinction and rental demand will not drop off without a house being built every 4.3 minutes
of and fair rent officers exist too
in germany people rent as lifestyle choice because generally they can buy as prices are very reasonable
people in this country rent because they cannot buy
in germany you can rent for 7 years,redecorate and the owners cannot give you notice when they feel like it...assuming you are living within the lease.
buying an asset that is falling in price for 20 years on the basis of renting to a shrinking market is nonsense
you said
"I believe that btl is totally flawed and prices will fall for 20 years and interest rates will rise "
so that isn't just a soundbite that gets disregarded as such please say why.
he reason why Germany works is beacuse the population are used to renting and accept that their is are renters and owners. Their isn't the boo hoo I am hard done by because I have to rent that we have here.
You need to get over the fact that the/your next generation will be renters or owners and most of them aren't giving it a thought, same as they are not saving for a pension. If you do care then buy a place for your own, which is another thing a lot of my generation have done. Another reason why the BTL thing is not flawed.
Buying now, sticking tenants in for the next 18 years simply makes sense.
Don't let my opinion from posting your reply to my request
well I've never rented and have no debt(owning cash),but I care about our kids and the next generation
I believe that btl is totally flawed and prices will fall for 20 years and interest rates will rise
others here think not
look to germany for fit for purpose rental market and its 10 x better than uk system
as usual time will tell
the current situation is totally unsustainable and the economics of madness
Shelter is not the solution, they are the problem!
Tenants rarely want to fix their lives for five years. I have seen an increasing number of tenancies ending because the couple have separated (( hate the term "split up since it brings to mind visions of bodies torn to pieces!) which appears to be on the increase.
Tenants like flexibility. I have tenants in one of my properties that have been there for nearly six years and no rent increase. Other tenants stay for as long as their courses, two and a half years being the second longest. Tenant prefer the flexibility of the current system.
If Shelter wish to become a political force then they must surrender their charitable status. If not, get beck to doing what they were set up to do - help the homeless, not stick their noses in where they are neither wanted nor required.
PS it is normal conversation to pick up on stuff that is wrong or one thinks is wrong. Taking bits of dialogue out of context, ignoring the point altogether or changing the subject is an unsaid admission of agreement or evidence of a real shallow understanding of the subject.
you are absolutely right this isn't about me it is about You.
You are the bloke "that will never rent again" along with your mates. As Ray has pointed out your sniping swing (off topic again) at what you understand as the unjust profiterring of BTL is simply childish sour grapes.
My point is to show you why an affluent older generation, smart enough not to get turned over again by the likes our your financial advisor have taken investment in house and are doing it for themselves.
Me, mine and my generation simply love long term tenancies, in one case our tenants are now our neighbours and our friends.
It is no wonder you are no longer in Agency you have' not got a clue
actually it was about this, dave
Shelter calls for five-year renting contracts
The hint is in the headline at the top of the page, but typically you tried to divert it from that topic to your normal "we're all doomed like japan" in the second post!!
Try to stay on topic, there's a good chap
but this is not about you is it...this is a discussion about btl in general
try thinking outside of yourself
Why don't you pick out a single line of a post without referring to the paragragh that says why the thousands of BTL portfolios won't come back on the market and use it as an excuse to blab on about japan again.
It is not going to happen. Interest rate rises will affect the debted and the new starter long long before those with portfolios even need to glance at the story in the newspaper.
I and people like me are landlords now and that is a career or second career that will last until we drop dead, or pass it to our offspring.
10% interest rates? bring it on! that will simply balance the portfolio of investments a bit more evenly.
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The whole theory of HPC is based on what will happen when rates go up. Errrrm not much!
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well thats very naive of you...why then are they 0.5%?
its not even if it happens....what amazes me is the amount of people who have no idea about risk management
mervyn king and alistair darling both said if they hadn't cut rates to 0.5% then the whole financial system and economy would have collapsed
btl would make no sense if prices fall and rates go up...you would be getting 5%+ in the bank without any capital loss
in japan prices fell for 20 years and the kids(who would be the rental market) left the country
where then for btl
The big benefit of renting is the freedom to move and move quickly. If one's firm moves from Cornwall to Tyneside one is free to move with it.
Once again Shelter have shown they do not understand the subject. A long term tenancy is desirable to those that want security of tenure, those that want a stable home life for them and their family and those who put location ahead of employment.
For good tenants most tenancies become periodic tenancies and they enjoy long term and secure tenancies, a system that works for Landlords and Tenants. The problem Shelter are trying to rectify here but they don’t understand that is what they are trying to do is address tenancies for bad tenants and perceived bad tenants. A rent assisted tenant especially those new to the complexities of the benefits system can find themselves without work, in a rented property where ‘the landlords does not accept DSS’ and has no money to pay rent because their naivety of the benefits system compounded by the benefits system itself. All this produces chaos for the Tenant, Agent and Landlord.
Personally I don’t think Shelter are helping themselves or tenants by producing a series of ill conceived reports and campaigns based on poorly manipulated data and seemingly put together by a marketing agency that has no understanding of the Social or Private rented sector.
All these press releases remind me of the program with Michael Barrymore “Kids say the funniest things” sadly misunderstanding this industry isn’t funny or helpful. Perhaps it it time to sit down and talk to the grown ups?
I am not sure you answered the question, but I will post my reply to your missing response
The whole point about the majority of BTL is that those properties are not owned in bulk by frivolous property entrepreneurs. It is people like me who when interest rates came down from 9 & 10 % carried on paying the same money as we had budgeted for, very soon 2 or 3 years started dropping off our mortgage terms and very soon mortgages that had 15 years to run were cleared.
It didn’t take a genius to work out that with a big equity asset and unencumbered income, the money put aside for the old mortgage each month would come in very useful. Release a couple of BTL deposits and have tenants create a property index linked pension asset that was free from normal pension restrictions and doesn’t cease when the owner does. The 25% of my BTL rent currently pays the interest, 25% covers the capital repayment leaving 50% to gnaw away at the mortgage term and the money I put aside for the original mortgage gets saved up for another deposit. (The ‘raped by bankers’ Endowment was enough to pay off the deposit release loan and pay for a new kitchen)
The whole theory of HPC is based on what will happen when rates go up. Errrrm not much! Picking the wrong stereotype of BTL investor shoots a very big hole in your theory.
The article contradicts itself in that it says a majority of tenants interviewed (66%) would welcome longer tenancies but goes on to say that the average tenancy is 20 months which ties in with our experience. My 'buy to let' landlords would welcome tenants committing themselves for five years but not if they have a 'two month' get out clause as that effectively makes it a two months tenancy and not a five year tenancy! In any case we give the tenants the option of six or twelve months tenancies and most opt for the former so there does not appear to be a great demand for longer tenancies.
if you are unmortgaged btl then you're okay but your capital would be falling and you would get 6-8% in the bank with no loss of capital(only loss if you sell obviously)
my broker today told me that contrary to the spin about people paying off debt its already increased from 1.2 trillion in 2007 to 1.4 trillion and reckoned to keep on rising to 2015-2017
scary stuff! its amazing how many people have made all their financial plans around 0.5% base rate
if you don't care about falling prices and lack of tenants then good luck to ya
You know about this stuff Dave, What would happen to all the people with unsecured personal debt if interest rates went up to 5%?
Given that a lot of my generation and older don't have any borrowings, loans or overdrafts, mine and their share of the average debt must be shared out between the remainder of the population. Anyone under 18 can’t contractually have loans, they can’t be counted so I reckon about half the population is fairly much over their head in debt. It isn’t the few hundred thousand BTL landlords who need be concerned about a rise in interest rates but those folk with Credit Card balances, car loans, finance on this that and the other etc who will be the real ones to lose out. I know its not you or you mates who have everything on tick but quite a lot of people debts bigger than any mortgage I have ever had and will end up paying 19% + for the privilege.
With any Shelter story divide the figures by 12, they are a bit rubbish at maths and stats. They are really after a 5 month Tenancy Agreements
Dave - Shelter could not give a brown tuppence towards the interests of landlords - they are only interested in their down at heel "victim" tenants - the 6 month Short Assured Tenancy is the landlords first line of defence and Shelter are trying to abolish it - I operate in Scotland and Shelter are firmly the landlord /agents enemy - I will stand against everything they stand for - back to the soup kitchen
theres a few btl landlords who will be thankfull for organisations like shelter
so far the government has bailed out the reckless and over endebted and punished the prudent
do ever think they won't change tact at some point
most btl landlords would be busted if interest rates were around 5% which is still historically very low
Do not underestimate Shelter - just ask any letting agent North of the border - re amendment to legislation to outlaw all tenant fees from 30.11.2012.
Message to Shelter - stick to what you are good at - your soup kitchen - stop meddling in Politics and Business - oops too late.
A typically ill thought out press release from Shelter sending out mixed messages across the board.
They claim that Landlords giving tenant two months notice is worrying to tenants, but they would like to give the tenant the option of giving two months notice in their Stable Rental Contract? why can't they see that that the same ability to give notice is worrying to landlords - most of them still have a mortgage to pay if the property is empty.
And if Shelter thinks getting possession can be 'easily' done then they are more deluded than I thought.
They need to look at the history of the PRS in the UK, from back before the first world war to present, to see what government interference/legislation does for the housing stock and investors.
if rented market is helping provide accommodation for people who cannot buy then tenant security is paramount
after all whats the objection to 5 year leases...if they don't pay then lease is void anyway
perhaps also we should tackle landlords who don't pay the mortgage
another example that the rental market is not fit for purpose and imo is destined to collapse
as houseprices fall,people will buy rather than rent as 90-100% mortgages will reappear...landlords(1.4 mill of them) are likely to wonder where all the tenants have gone
further on...'terrible tenants' will be buying the liquidated portfolios of btl bankrupt landlords
It is about time Shelter climbed out of it's ivory tower and joined the real world. Also an understaning of how Assured Shorthold Tenancies(AST) work would be good. It is the landlord who is exposed. To end an AST the landlord must issue a Section 21 to ensure he gets his property back wheras a tenant can stall about his intentions and leave without notice on the last day - thus creating a void period for the landlord.
Regarding rent increases when we try to enforce a rent increase that is signalled and signed for in the AST the tenants invariably threaten to vacate and often do - this they create their own uncertainty.
Tenants will complain about landlords when they have been treated fairly but have been found wanting - classic example - policewoman with 2 children vacating - drawings all over bedroom walls - no attempt at cleaning it - claimed it was fair wear and tear. Did not like it when she had to pay to put it right - she is the type of tenant who will complain about being ripped off.
The main problem is unregulated landlords and agents and unscrupulous and non- caring agents.
There is nothing wrong with the current situation if all parties observed the law