Latest / Merryn Talks Money / UK Renters’ Rights Act: What Tenants and Landlords Need to Know

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UK Renters’ Rights Act: What Tenants and Landlords Need to Know · Merryn Talks Money

0:02
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
0:08
Speaker 2: Hello, Meron talks Money listeners. Just before we get started
0:11
Speaker 2: with today's episode and how things are changing for UK landlords,
0:14
Speaker 2: I wanted to flag that we're hosting an event at
0:16
Speaker 2: Bloomberg's European headquarters in London on Thursday, November twenty seventh.
0:21
Speaker 2: Meron Talks the Budget. We're recording the show live in
0:24
Speaker 2: front of an audience the morning after Rachel Reeves's UK Budget,
0:28
Speaker 2: So join us for quas, songs and coffee and conversation.
0:31
Speaker 2: Regular podcast guest Helen Thomas, the Blonde Money, who's one
0:35
Speaker 2: of the smartest political commentators out there, certainly in my experience,
0:38
Speaker 2: is going to be one of our guests, so you
0:40
Speaker 2: won't want to miss it, So find a registration link
0:43
Speaker 2: in the show notes. Welcome to Meron Talks Your Money,
0:56
Speaker 2: the personal finance edition of Meron Talks Money, and these
0:59
Speaker 2: bonus podcast we talk about the best strategies for making
1:01
Speaker 2: the most of your money. I'm join Stepics, senior reporter
1:05
Speaker 2: and Money Distilled author. Marton is currently still on holiday,
1:09
Speaker 2: but fear not. Later this week will be bringing you
1:11
Speaker 2: a conversation she had with the great Art Laugher economist,
1:15
Speaker 2: author and the inventor of the Laugher curve. He's just
1:17
Speaker 2: co authored a new book focused on revitalizing the UK economy,
1:21
Speaker 2: so again you really won't want to miss that one.
1:23
Speaker 2: Tune in later this week. But for this conversation, we're
1:26
Speaker 2: focusing on the new rules of being a UK landlot.
1:31
Speaker 2: So we're talking about the Renter's Right Spill, which was
1:34
Speaker 2: introduced to Parliament last year and it's expected passing the
1:37
Speaker 2: law before the end of this year. It represents the
1:40
Speaker 2: most comprehensive overhaul of UK tendency rules in decades, where
1:44
Speaker 2: it is proven to be quite controversial. So let's get
1:47
Speaker 2: to watch change in how landlords will be affected with
1:50
Speaker 2: my guest today as Helen Chandler Wilde, who's a Bloomberg
1:53
Speaker 2: reporter who just published a really comprehensive take and all this.
1:57
Speaker 2: And Stuart True, Bloomberg opinion columnist, host of Money and
2:01
Speaker 2: Money on Switch Radio, an author of The Bluffers Gata Economics,
2:05
Speaker 2: and he's also a landlock. So we've got first hand
2:08
Speaker 2: experience today and now I'm going to start with you, Helen.
2:12
Speaker 2: Can you talk us through the rentals rates built? Actually
2:16
Speaker 2: is what the mean changes are.
2:19
Speaker 3: Sure, so it's pretty comprehensive and complex piece of legislation,
2:23
Speaker 3: But one of the most important and most discussed things
2:26
Speaker 3: is the end of no fault evictions. So basically that
2:30
Speaker 3: means that once you've rented a property, your landlord can't
2:34
Speaker 3: boot you out just because they want to have someone
2:36
Speaker 3: else move in or something like that. The only reasons
2:39
Speaker 3: that they can boot you out is if they themselves
2:43
Speaker 3: want to move back into the property, if they want
2:45
Speaker 3: to sell it, or if their family wants to move
2:46
Speaker 3: back in. And another really massive change is the end
2:50
Speaker 3: of fixed term tenancies. So at the moment, it's very
2:53
Speaker 3: normal when you rent a property to rent on a
2:55
Speaker 3: year long contract or a two year contract, but now
2:58
Speaker 3: that will be ended. People do find those convenient, both
3:03
Speaker 3: renters and landlords. So say, if you're moving and your
3:06
Speaker 3: work has put you says you've got to move to
3:09
Speaker 3: London for a year, you want to get a year tenancy,
3:13
Speaker 3: but now it will just everyone will just be going
3:15
Speaker 3: month to month, So basically your contract will last indefinitely,
3:20
Speaker 3: but with a minimum at tenancy of twelve months at
3:23
Speaker 3: the start, where the landlord can't ask you to leave
3:25
Speaker 3: for any reason.
3:26
Speaker 2: And just to be cleveland that sort if that's rule
3:29
Speaker 2: in month to month contracts, but that doesn't mean the
3:32
Speaker 2: landlord can tell you leave the month exactly what the
3:35
Speaker 2: month's notice does it because it's just detain and can
3:39
Speaker 2: leave with a month's exactly.
3:40
Speaker 3: Yeah, the whole point of the bill is that it's
3:42
Speaker 3: trying to shift power from landlords back onto tenants. So obviously,
3:47
Speaker 3: anyone with who's read any slipper of news over the
3:49
Speaker 3: last twenty years knows that houses are very expensive and
3:53
Speaker 3: that is a massive problem in people's lives and the
3:55
Speaker 3: intention of the bill is to try and help tenants.
3:59
Speaker 3: So in London at the moment, if you want to
4:01
Speaker 3: rent just one room in a sheard flat, the average
4:04
Speaker 3: of that is one thousand pounds a month, and then
4:06
Speaker 3: on top of that, obviously you have your counsel, tax,
4:07
Speaker 3: all your bills and everything, so it's super expensive. And
4:10
Speaker 3: on top of that, because of the housing shortages that
4:13
Speaker 3: we have, landlords have a lot of power, so people
4:16
Speaker 3: can be kicked out or their rent could be raised
4:18
Speaker 3: on them with no notice, and you just don't really
4:20
Speaker 3: have another option as a tenant. So they're trying to
4:23
Speaker 3: address that by flipping the power over to the tenants
4:26
Speaker 3: by saying that you can leave when it's convenient for you,
4:29
Speaker 3: but the landlord can't kick you out. That's the intention
4:32
Speaker 3: of the bill. However, I'm not entirely sure we can
4:36
Speaker 3: discuss this if that is going to be the effect
4:38
Speaker 3: of it, because lots of things we've seen throughout history.
4:42
Speaker 3: Rent controls sound amazing, All those things sound amazing, but
4:45
Speaker 3: when you're trying to manipulate and intervene in supply and
4:49
Speaker 3: demand economics, you're probably not going to get the outcome
4:52
Speaker 3: that you want.
4:54
Speaker 2: Because this is the other thing, isn't it If the
4:55
Speaker 2: landlord changes the rent and you'd disagree with it as
4:59
Speaker 2: it and you can take them to a tribunal. Is
5:02
Speaker 2: that the story? And up until the tribunal decades up
5:08
Speaker 2: the original.
5:08
Speaker 3: R yes and also land laws can only raise the
5:11
Speaker 3: rent once a year from this time going forwards, and
5:15
Speaker 3: so basically the rent increases can be looked at by
5:18
Speaker 3: this tribunal system where they will be judged in accordance
5:20
Speaker 3: with what rents are generally. And there's another change as
5:24
Speaker 3: well that I didn't mention before about pricing, which is
5:27
Speaker 3: that at present, when you go and in London. You
5:30
Speaker 3: try and rent a flat and it's very stressful. You
5:32
Speaker 3: go for a viewing, there's a million other people there,
5:35
Speaker 3: and then afterwards it's more like what people might be
5:39
Speaker 3: used to when they're buying somewhere where afters you get
5:41
Speaker 3: into a bidding process, but you now do bids with
5:44
Speaker 3: rents as well, so people will be bidding against each
5:47
Speaker 3: other saying how much can I pay a month for this,
5:50
Speaker 3: and so it will almost always go for above the
5:52
Speaker 3: asking price, So that's now illegal as well. So you'll
5:55
Speaker 3: basically just advertise the price of the flat and that's
5:59
Speaker 3: the price you have to go for. Unfortunately, the problem
6:02
Speaker 3: is that that hasn't addressed the fact that there's just
6:05
Speaker 3: not enough supply for the demand that there is, so
6:08
Speaker 3: land Words will still get loads of people wanting to
6:11
Speaker 3: rent their place, so they will have to filter. If
6:14
Speaker 3: you can't filter by price, you're going to filter buy
6:15
Speaker 3: something else. This is an example for a friend of
6:18
Speaker 3: mine who lived in Paris for many years, where they
6:20
Speaker 3: have rent controls, she is extremely even harder than in
6:24
Speaker 3: London to find a place to live. It's so hard
6:27
Speaker 3: because the supply is effectively reduced and everyone is going
6:32
Speaker 3: for these flats that are on the market. So the
6:34
Speaker 3: filtering mechanism that the landlords use is they'll ask you
6:37
Speaker 3: to supply your bank statements for years and years and
6:40
Speaker 3: years into the past, because they basically want to find
6:44
Speaker 3: the most reliable tenant that they can for their property,
6:48
Speaker 3: who they can they're most sure will be able to
6:50
Speaker 3: keep paying the rent and they won't default on them.
6:53
Speaker 3: That unfortunately means that the richest people are still getting
6:56
Speaker 3: the flats. It's just that you're basically giving rich people
6:59
Speaker 3: a day on their rent. That is not what anyone
7:02
Speaker 3: thought would happen when they introduce those policies. That is
7:05
Speaker 3: not the intention of it, and that is like not
7:08
Speaker 3: a good outcome for anyone except for the rich renters
7:11
Speaker 3: who are now randomly getting a discount. So yeah, so
7:15
Speaker 3: I'm just saying that that's another example of where what
7:18
Speaker 3: you want to happen is not necessarily what will happen.
7:22
Speaker 3: I completely understand it's so awful being a tenant because
7:27
Speaker 3: there are so many people going after these flats and
7:29
Speaker 3: so few flats. But if you're just trying to make
7:33
Speaker 3: that transaction harder for people, it won't necessarily help anyone
7:39
Speaker 3: in the long run. Or maybe it will help some people,
7:41
Speaker 3: but they might be a minority. The fundamental issue is
7:44
Speaker 3: we haven't built many flats, especially in London. The building
7:47
Speaker 3: is just not happening.
7:49
Speaker 2: So yeah, have you currently inn?
7:53
Speaker 3: I actually own a flat which I bought a few
7:55
Speaker 3: years ago, and I cannot tell you the difference in
7:58
Speaker 3: my quality of life from getting out of the rental
8:01
Speaker 3: market because I have had every form of crazy landlord
8:05
Speaker 3: that there is. I've had damp issues. I had one
8:08
Speaker 3: where admittedly we did scratch the lino a little bit
8:13
Speaker 3: in the kitchen from moving the fridge, but it was
8:15
Speaker 3: like two inches. She tried to charge us four grand
8:18
Speaker 3: to fix that, which and the quote she gave us
8:21
Speaker 3: was for replacing the flooring in the entire flat with
8:24
Speaker 3: it had been liningo before. She wanted to replace it
8:27
Speaker 3: with solid wood. And it's like we had to take
8:29
Speaker 3: her to a tribunal target. That's just crazy, Like that's
8:32
Speaker 3: not fair. So I have seen both sides of it,
8:36
Speaker 3: and I'm very glad to be out of that now.
8:38
Speaker 2: Basically at this point, I'll.
8:44
Speaker 3: And that's not a dis against sture. I'm sure he's
8:46
Speaker 3: a lovely, lovely landlord to be Cliff there are some
8:49
Speaker 3: good ones.
8:52
Speaker 2: I do think this is a this is that she
8:54
Speaker 2: hit a little because you're right. I mean, one of
8:56
Speaker 2: the problems is that there is the economic issue, which
9:01
Speaker 2: is don't like rent controls basically don't work. On the
9:05
Speaker 2: other hand, there are so many horror stories on both sides,
9:08
Speaker 2: like because landlords have awful tenants, but tenants have awful landlords.
9:13
Speaker 2: I mean, I haven't rented for a long time, but
9:16
Speaker 2: I remember even twenty years ago when I was renting,
9:19
Speaker 2: it was an absolute minefield. It was Cowboysville. And to
9:24
Speaker 2: be absolutely honest, in my experience, the worst people were
9:26
Speaker 2: not actually the landlords. They were the people in between,
9:29
Speaker 2: the sort of property agents. They kind of really dodgy, sleazy,
9:34
Speaker 2: kind of like tenancy managers, things like that. And I
9:37
Speaker 2: understand that that side of things has been tidy up
9:40
Speaker 2: a little bit. But what what was your take on
9:43
Speaker 2: this toure Because at the same time, you know, we
9:45
Speaker 2: were talking about the end of Section twenty one tenancies here,
9:49
Speaker 2: but so as I understand it, the idea the landlord
9:52
Speaker 2: can't just kick you out even now you are what
9:56
Speaker 2: is it a minimum is six months? There are sure
9:58
Speaker 2: short old tenancies are right.
10:01
Speaker 1: Well, Under the old system, it was two months notice,
10:05
Speaker 1: you know, so the once the fixed period the tenancy
10:08
Speaker 1: had expired, the contract could be rolled over, so you
10:13
Speaker 1: didn't have to have a new tenancy, which often agents
10:16
Speaker 1: would insist on a new tenancy. You didn't actually have
10:18
Speaker 1: to have that. You do what's called rolling over. Tenant
10:22
Speaker 1: needs to give one month's notice, you'd need to give
10:25
Speaker 1: two months notice. So that was the kind of old system.
10:27
Speaker 1: And yeah, no, I mean, to be honest, I don't
10:30
Speaker 1: really see too much problem with the ending of no
10:34
Speaker 1: fault evictions per se, because I mean, basically, if we've
10:37
Speaker 1: got a good tenant, we you know, we always say
10:39
Speaker 1: to tenants moving in they're paying the rent and not
10:41
Speaker 1: smashing the place up, we're happy for them to stay
10:43
Speaker 1: as long as possible because we were committed to the
10:46
Speaker 1: market in that sense. There are unintended consequences, you know,
10:53
Speaker 1: such as ending fixed terms make it very difficult to
10:56
Speaker 1: manage something like student accommodation where you kind of only
10:59
Speaker 1: need it for a fixed term, and then if you
11:01
Speaker 1: get one student who wants to stay, you know, but
11:04
Speaker 1: that's not an area where we necessarily rent in any way.
11:06
Speaker 1: But you know, these are that's an example of the
11:09
Speaker 1: unintended consequences you get in terms of arbitration. You know,
11:14
Speaker 1: I absolutely think that's a positive development as long as
11:18
Speaker 1: it's resourced properly, because you know, one of the problems
11:21
Speaker 1: is is that if tenants complaints aren't addressed, they effectively
11:26
Speaker 1: become a story that confessed her. So you know, if
11:29
Speaker 1: you've got a chance to put up or shut up,
11:31
Speaker 1: you know, say, well the landlord did X, y Z,
11:33
Speaker 1: and somebody who's in a position to know how the
11:36
Speaker 1: market works, because they well, yeah, that's wrong. They shouldn't
11:39
Speaker 1: be doing that and can make a ruling, that's great.
11:42
Speaker 1: And likewise, if they're saying, look, this is frivolous, You've
11:45
Speaker 1: you've not paid your rent for six months. You're just
11:47
Speaker 1: sort of trying to that. You know that that's good
11:51
Speaker 1: in terms of getting things out into the open. And
11:54
Speaker 1: you know, there's a lot, there's a lot that I
11:56
Speaker 1: wouldn't necessarily disagree with. What I'd say, though, is that
12:02
Speaker 1: it you know, one of the fundamental problems that Helen
12:04
Speaker 1: alluded to was that the kind of ship has sailed
12:07
Speaker 1: in terms of whether being a landlord is a worthwhile
12:11
Speaker 1: occupation anyway. You know, financially, you're not actually covering your
12:16
Speaker 1: cost to capital. You know, even if you're all equity,
12:18
Speaker 1: you've got an implied cost to capital, and you know
12:21
Speaker 1: that has practical consequences. It means that when you have
12:23
Speaker 1: to do any work to meet EPC regulations, or you know,
12:27
Speaker 1: you're building new developments stuff like that, the easiest way
12:32
Speaker 1: of funding that is by selling parts of your existing portfolio,
12:35
Speaker 1: because that's the cheapest funding you're going to get. And
12:38
Speaker 1: you know, from from my perspective as a landlord, that's
12:42
Speaker 1: not what we're doing currently. But it means that as
12:45
Speaker 1: properties become available, the best use of that capital that's
12:48
Speaker 1: freed up is actually to pay down debt and then
12:51
Speaker 1: exit the market, you know, because you can't justify reinvesting
12:55
Speaker 1: capital to produce more capacity.
12:57
Speaker 2: This is sort of the cruct say, the issue at
12:59
Speaker 2: the moment. It's like all of these regulations are being
13:02
Speaker 2: introduced because of problems that arise from their not actually
13:06
Speaker 2: being enough property where there needs to be. As I recall,
13:32
Speaker 2: at least sort of landlord started to become public enemy
13:35
Speaker 2: number one around about twenty fifteen, when George Osborne started
13:39
Speaker 2: with the rules on getting rid of you could claim
13:43
Speaker 2: mortgage interest payments against your your course of doing business,
13:49
Speaker 2: and now you can't unless you incorporate. What was the
13:52
Speaker 2: point of doing that, what was the goal basically, what
13:56
Speaker 2: is the goal being behind trying to annihilate the amateur
13:59
Speaker 2: landlord because that has been government policy for about a
14:02
Speaker 2: decade now.
14:03
Speaker 1: Well, I think there are quite a few misconceptions about
14:06
Speaker 1: how the property market actually works, and in particular, how
14:11
Speaker 1: it affects people who can't access the owner occupied market.
14:14
Speaker 1: So Helen was in a very fortunate position being able
14:17
Speaker 1: to say, right, I don't like being a tenant. I'll
14:19
Speaker 1: be a home owner instead, and that's great. And we're
14:23
Speaker 1: seeing a lot of that from landlords. You know, landlord
14:26
Speaker 1: sales have been absorbed, absorbed by first time buyers to
14:29
Speaker 1: a certain extent, you know, so wealthier tenants are actually
14:33
Speaker 1: probably it's wrong to say they're living their best lives
14:37
Speaker 1: because rent is phenomenally expensive, but at least they've got
14:39
Speaker 1: a reasonable amount of choice. That the crisis element comes
14:43
Speaker 1: from the people displaced to small landlord's exit because small
14:47
Speaker 1: landlords tend to occupy the cheaper end of the market.
14:51
Speaker 1: I know, rents don't seem cheap, but relatively speaking, So
14:54
Speaker 1: when you get displaced from that, you've got no place
14:57
Speaker 1: to go. So that's why social in waiting lists over
15:01
Speaker 1: a million. That's why I think the latest figure is
15:04
Speaker 1: either one hundred and thirty two one hundred and thirty
15:06
Speaker 1: four thousand families are in emergency accommodation, which is a
15:11
Speaker 1: phenomenally expensive way of housing anybody. And you know, for
15:16
Speaker 1: a further extreme is you know, obviously we've got tens
15:18
Speaker 1: of thousands of people living on the streets, so it's
15:21
Speaker 1: not for wealthier tenants that there's the problem. And in fact,
15:25
Speaker 1: to be honest, the Rentes's Rights Bill will significantly strengthen
15:30
Speaker 1: the situation for wealthy attendance, but it won't necessarily do
15:33
Speaker 1: very much to address the emerging problem with people who
15:38
Speaker 1: struggle to access the private rental market in the first place.
15:43
Speaker 3: And I think also on the historical point there you're
15:46
Speaker 3: saying about those timelines after the financial crash, when interest
15:50
Speaker 3: rates were effectively zero, property was actually a pretty attractive
15:54
Speaker 3: investment because it was one place that you could still
15:57
Speaker 3: get a return as property prices were going up and
16:00
Speaker 3: everywhere else like you're chasing zero interest. So I kind
16:05
Speaker 3: of have often wondered if that was like a compensatory
16:08
Speaker 3: mechanism to force people to not pour so much of
16:13
Speaker 3: their assets and wealth into the property market and like
16:15
Speaker 3: look further returns elsewhere, because it was just like a
16:18
Speaker 3: weird period of loads of distortions for wealth.
16:20
Speaker 1: Oh yeah, no, no, I mean extreme monetary easing brought
16:26
Speaker 1: about all manner of misallocations of capital. But I think
16:31
Speaker 1: one of the one of the other issues though, is that,
16:33
Speaker 1: you know, the boom that preceded two thousand and eight
16:35
Speaker 1: crash was largely driven by investors buying property of plan,
16:42
Speaker 1: and that hasn't worked out very well because these are
16:45
Speaker 1: the properties with the cleading issues. These are the properties
16:48
Speaker 1: that built on slide planes. These are the properties that,
16:51
Speaker 1: even for fairly benign reasons, appear to be unmortgagable and
16:55
Speaker 1: hence unsaleable. So you know, to characterize vito let investing
17:00
Speaker 1: is risk free is missing the point. You know, there
17:03
Speaker 1: are hundreds of thousands, not millions, of properties in the
17:06
Speaker 1: UK today that you can't raise a mortgage on that
17:08
Speaker 1: you might have been able to do ten fifteen years ago.
17:12
Speaker 2: How much of this is London versus the rest of
17:17
Speaker 2: the UK problem, I quite often look at house places,
17:20
Speaker 2: and when you look at house spaces you kind of
17:21
Speaker 2: realize that the real issue is mostly in the Southeast,
17:24
Speaker 2: and that are parts of North England particularly that haven't
17:28
Speaker 2: seen house places move since about two thousand in nominal
17:31
Speaker 2: terms like alone real terms. So how much of this
17:35
Speaker 2: is because all of the people who talk and write
17:37
Speaker 2: about this stuff can of light live and within or
17:40
Speaker 2: slightly without the M twenty five.
17:43
Speaker 3: I think that that was a reasonable argument to have
17:45
Speaker 3: made a few years ago. But when I speaking to
17:48
Speaker 3: people for the Peace, all of the landlords and stuff
17:50
Speaker 3: I'm speaking to, they're saying that all the excitement now
17:53
Speaker 3: zero excitement in London and Southeast. All the landlords are
17:56
Speaker 3: looking at other areas because that is where you're still
17:59
Speaker 3: getting a reasonable annual return on the investment of buying
18:03
Speaker 3: the place compared to what the rent is, and also
18:05
Speaker 3: where property prices are still going up. Because in London,
18:08
Speaker 3: as you John her Britain about, property prices are just
18:11
Speaker 3: not going up. And there are definitely like issues with
18:16
Speaker 3: cowboy landlords everywhere. And a particular problem that we have
18:20
Speaker 3: seen in regional places is where there have been these
18:23
Speaker 3: massive growths of universities that puts a massive pressure on
18:28
Speaker 3: the rental market because obviously then there's suddenly tens of
18:31
Speaker 3: thousands of people who want to rent places and that
18:34
Speaker 3: has pushed up rents in places and made it very difficult.
18:38
Speaker 3: Like if you were living in Durham saying you want
18:40
Speaker 3: to you're not a student and you want to rent somewhere,
18:43
Speaker 3: you're competing against all of these people. Some students are
18:46
Speaker 3: like international students with a lot of money, and that
18:49
Speaker 3: obviously puts a lot of pressure on places.
18:52
Speaker 2: Is there any kind of solution to this? And always
18:56
Speaker 2: stud you've letten a lot about the problem in like
18:58
Speaker 2: them because at the moment, but he's built in the
19:00
Speaker 2: anathing in London and presumably this just adds more reasons
19:06
Speaker 2: not to do that, because basically the argument is that
19:10
Speaker 2: you're not getting compensated with a yield or a return
19:13
Speaker 2: that's conventioned it with the rescue you're taken, and more
19:16
Speaker 2: regulation just increases the cost without you know, doing anything
19:21
Speaker 2: about the kind of reton So, I mean, what is
19:24
Speaker 2: the solution here, because you know, presumably it's not it's
19:27
Speaker 2: not a deed regulation, is it? Is it planning rules?
19:30
Speaker 3: What is it?
19:31
Speaker 1: Well, it's a combination of things, but they you know,
19:34
Speaker 1: basically investment has to pay at the end of the day.
19:36
Speaker 1: Just working on a piece of the moment. The fundamental
19:39
Speaker 1: issue is if your house owner or or you're looking
19:43
Speaker 1: to buy a property at the moment, it's difficult to
19:45
Speaker 1: see the sense of crisis in the market because you know,
19:48
Speaker 1: there's plenty of supply around if you're looking to buy,
19:51
Speaker 1: and if you're an owner, you know it takes taking
19:54
Speaker 1: ever longer to sell because simply because there's a surplus
19:57
Speaker 1: to start, you know. And the real problem is we
19:59
Speaker 1: discus before, is that further down the value chain people
20:04
Speaker 1: are finding it hard to access the private rental market.
20:08
Speaker 1: So if you're if you're wealthy enough to be able
20:11
Speaker 1: to rent, and then you know it's quite a high
20:12
Speaker 1: hurdle to do that. Buy and large Renter's Rights Bill
20:15
Speaker 1: will help you and although it's very expensive to do
20:18
Speaker 1: so you can access the market. So people can't access
20:22
Speaker 1: the market that are having the problem and are causing
20:25
Speaker 1: a knock on cost for government and exchequer and all
20:28
Speaker 1: the rest of it. And you know, and there's a
20:29
Speaker 1: fundamental truism and I know people will argue against it,
20:32
Speaker 1: but it's difficult to get away from it. You can't
20:35
Speaker 1: have subsidized housing without the subsidy, and you know, the
20:39
Speaker 1: way London has chosen to do that is to insist
20:43
Speaker 1: that up to thirty five percent of the new development
20:45
Speaker 1: is in mark for affordable housing. But the housing associations
20:50
Speaker 1: that generally take that on board haven't got the finance
20:53
Speaker 1: to even take up their share of that, which has
20:56
Speaker 1: resulted in I don't know the exact number, but certainly thousands,
20:59
Speaker 1: if not tens of thousands of completed new properties that
21:04
Speaker 1: are standing empty simply because the housing association can't take
21:07
Speaker 1: their you know, their mandated chair and the developers can't
21:11
Speaker 1: free up enough capital to be able to move on
21:13
Speaker 1: develop something else. So you know, so that's a fundamental problem.
21:16
Speaker 1: But then also construction costs have gone through the roof,
21:19
Speaker 1: you know, sort of if you've got to remediate for
21:22
Speaker 1: environmental standards, which is great and you know, there's no
21:24
Speaker 1: reason why that shouldn't be done, but one of the
21:27
Speaker 1: anomalies is there's there's a very easy arbitrage. If you're
21:30
Speaker 1: a landlord looking to sidestep the EPC regulations, well, you
21:34
Speaker 1: simply sell your property because there are no EPC requirements
21:39
Speaker 1: for owner occupied property, So you know it's worth your
21:42
Speaker 1: flat is literally worth more in the owner occupied sector
21:46
Speaker 1: than it is as a rental investment.
21:50
Speaker 2: Well, yes, that's I suppose if we bring it back
21:56
Speaker 2: to the perstal finance say the things. I mean, I
21:58
Speaker 2: think there's an obvious answer that that's what. But there's
22:01
Speaker 2: no a good team to become a falster tame landlord.
22:06
Speaker 1: No, not really. I mean, you know, there's strategic reasons
22:09
Speaker 1: why people might want to do that. If they were
22:13
Speaker 1: if they wanted to say they were moving abroad to work,
22:15
Speaker 1: they might want to keep a toe hold in the
22:18
Speaker 1: UK market, So having renting out their property that you
22:21
Speaker 1: know that can work. But in general as an investment,
22:25
Speaker 1: you're not going to realize the returns. And you know,
22:28
Speaker 1: I'm clearly the financial aspect is one thing, but also
22:31
Speaker 1: you know, I'm very conscious of the landlord. The atmosphere
22:34
Speaker 1: has been made extremely toxic.
22:37
Speaker 3: One last point I'd like to make is just in general,
22:40
Speaker 3: when you're looking at policy announcements at the moment, I
22:43
Speaker 3: would just be very very cautious about believing things as
22:47
Speaker 3: they're written down, because one problem is that we just
22:50
Speaker 3: don't have capacity in loads of public services, so things
22:53
Speaker 3: like when they say, oh, don't worry, if you want
22:56
Speaker 3: to return to your property, you can just give the
22:58
Speaker 3: tenant notice and they will leave. That's actually very complicated
23:01
Speaker 3: by the fact that there can be like in some places,
23:03
Speaker 3: like a year long delayed to get bailiffs. So on paper,
23:07
Speaker 3: sure that is the law, but in practice that may
23:11
Speaker 3: not be the law. So and that happens just like
23:13
Speaker 3: across the board with all policies at the moment that
23:16
Speaker 3: absolutely basically nowhere is actually following the letter of the
23:19
Speaker 3: law of what we're meant to be doing, because there's
23:21
Speaker 3: just capacity issues everywhere.
23:23
Speaker 2: Yeah, it feels as if well you're read, there's this
23:26
Speaker 2: also this gap between does the question if the regulations
23:30
Speaker 2: will be right even if they were as advertised, But yeah,
23:34
Speaker 2: there's the whole backlog everywhere. And I guess one of
23:37
Speaker 2: the points people have been making is that economically rational thing,
23:42
Speaker 2: if not the kind of moral thing for any tenant
23:44
Speaker 2: to do, would always be to challenge any raise in
23:48
Speaker 2: rent because it's going to take so long a clear
23:51
Speaker 2: the backlock that they could still be paying their original
23:53
Speaker 2: rent at the time they actually want to leave. First
23:56
Speaker 2: time buyers any implications for them.
24:00
Speaker 3: I'm not sure, but it could be slightly preferable if
24:03
Speaker 3: they're because often the places that are rented are those
24:06
Speaker 3: smaller properties which first time buyer might also want to buy.
24:10
Speaker 3: The problem is what their rental journey will have looked
24:13
Speaker 3: like by the time they say for their deposit. If
24:15
Speaker 3: this inadvertently makes it more difficult and more expensive, will
24:19
Speaker 3: that make it harder to save for your deposit in
24:21
Speaker 3: the first place. Who knows. We'll have to wait and see.
24:23
Speaker 2: Does it anything else either? You want to idently you
24:25
Speaker 2: think we haven't covered.
24:27
Speaker 3: Well, we didn't get time to talk about EPCs and
24:30
Speaker 3: the environmental certificates, but the rules and those are also
24:34
Speaker 3: being tightened up, which is quite tricky in the UK
24:38
Speaker 3: because we have a lot of old buildings and they
24:40
Speaker 3: can be hard to make energy efficient. So that is
24:43
Speaker 3: also a bit of a question. But you could read
24:46
Speaker 3: my piece if you want to know more.
24:48
Speaker 2: I think yes, yeah, another expense. Yeah, well look, thanks
24:53
Speaker 2: very much, but with you really appleased that you're coming
24:55
Speaker 2: in who share your expertise to do? Thank you, Thanks John,
25:06
Speaker 2: Thank you for listening to this week's Merton Talks Your Money.
25:09
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25:23
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25:28
Speaker 1: At Benchman UK.
25:31
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25:34
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25:36
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25:42
Speaker 2: notes for your early morning breakfast slot Thursday November twenty seventh,
25:47
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