Data gathering puts UK on course for national rent cap.

Data gathering puts UK on course for national rent cap.

Today we would like to ask the government this:

Can you categorically rule out a national rent cap?

[ UPDATE ]

So now we ask the question:

How will you bridge the gap between an improving economy and rising rents
VS
a lack of housing stock and capped benefits? ? ?

Original blog:

At Landlord Referencing Services we seriously wonder whether the coalition are priming the entire Private Rented Sector, in order to introduce a legislative cap on rental properties, at a national level.

SPECULATION!

HEAR’SAY!

CASTING ASPERSIONS! we hear you cry…

At Landlord Referencing we believe that a bit of speculation is needed in these times of constant government U-turns; to avoid more. So please read on as to why and how Landlord Referencing Services wonder whether national rent caps could be just around the corner; after-all, we were not wrong about:

Benefit laws could bring unprecedented problems to landlords.

New government policy will breed rogue landlords.

Pay Day Loans Repayment Vs Rent.

Government throwing swathes of cash at defunct banks will put UK in double-dip recession.

Universal Credit ends direct payment of housing benefit to landlords.

 

Under the Conservative/LibDem coalition the PRS has recently undergone a revolution of data gathering processes, e.g.

  • Impending welfare reform changes have meant re-calculation of every single benefit received in the UK.
  • April 2012 :Every rental property, commercial or residential, must have an EPC commissioned before marketing to let.
  • May 2012 : Deposit Protection – All tenants deposits must be protected within 60 days of a tenancy starting.
    (England & Wales)
  • Newham council introduce first mandatory licensing scheme, to go live in January 2013.
  • Welsh landlords face compulsory accreditation, expected to go live within 12 months…

Clearly this data gathering process by the government is identifying every landlord in the country, every rented property in the country, along with the areas and streets with which they are located in.

Therefore once all the required data is gathered; is the Private Rented Sector looking at its final nail in the coffin AKA rent capping ?

A rent cap could easily be introduced in a similar fashion to council tax rate bands, e.g.

A one bedroom flat, in a marginally depressed area, in Band A ; annual council tax payable = £800.

50% of this could then represent the monthly rent via the rent cap = £92.30 a week/£400 a month for a one bedroom flat.

Basically meaning that rent would be proportionate to the council tax band area.

The recurrent trend indicates that the government is looking to accredit every single landlord in the country, register every single rent in the county and register every single property in the country – why is this?

Furthermore, how will the government continue to support welfare payments as rents rise without a long term view to capping all rents?

With benefits continually being cut and the shortage of P.R.S stock and housing stock in general, the government have no option but to  look to the P.R.S to house people. But as our economy grows rental property prices will inevitably increase, creating a greater divide between rising rents and capped benefits.

The government openly admit that by reducing benefits their aim was to bring private rental prices down but they have either remained stable or risen, and as the economy returns they will inevitably rise again.

Which leads us back to the only answer; national rent capping or homelessness…?

Are we being unduly paranoid OR are we seeing through the governments smoke and mirrors?

Whatever your view is, for or against, we want to hear from YOU!
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Author: Tenant Referencing

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4 Comments

  1. Pingback: RICS Housing Commmision Report - June 2013 @ Landlordreferencing.co.uk | LandlordReferencing.co.uk

  2. Good idea Paul, Henry VIII did something similar, it is said he stayed at nearly every stately home in the south east, perhaps he chose his wives from the tenants!

    I stopped renting to under 35’s as soon as the government announced that it was intending to cap their housing allowance. Now the local charities in my area (Kent) are desperately looking for accommodation for these people, the law of unintended consequences. I expect that there will be similar unintended consequences if rent capping is introduced.

    Being a cynic I feel the real reason for all this regulation is to keep track of landlords income for tax purposes. A months deposit tells HMRC exactly how much a landlord should be declaring. Licensing gives a further check on rented properties and income which should be declared.

  3. What I would do is just rent out to lodges, no AST required as I would be living at all my properties.
    They won’t be able to cap lodgers rents as they are not tenants.
    All one has to do is charge an all incluv ie price for everything and give a lodgers agreement.
    This gives the LL the ability to enter the property any time he likes as he lives there.
    Of course in practice this would not normally happen.
    There is nothing to stop a LL having many residences whih he resides at at irregular intervals.
    Lodgers disappear off the govt radar.
    This would only be of use to PRS tenants, LHA ones would be stuffed or rather the LHA LL will be.
    I can rent a 2 bed flat to lodgers at £650 each room all inclusive.
    My name would be on the council tax bill.
    Yes a bit of a risk on utilities but you could have the bills in the name of the lodgers and govt wouldn’t know a thing.
    Govt would never know3 I have 2 lodgers in my flat as there would be no AST. no DPC etc.
    Fraid govt will have to think again they can easily be beaten.

  4. If rent capping was intoduced and interest rates went up I would be bankrupted.
    Then no property avaialable to tenants.
    There would be hundreds of thousand so LL in a similar position.
    Where would all the boooted out tenants go.
    Banks would be left with hundreds of thousands of repossessed property.
    Imagine the effects on thwe banks, worse balance sheet, less lending etc, etc.
    Another silly idea from govt.
    LL will just ignore rent caps if renting to tenants.
    they will just take capped rent plus some more under the table.
    If a tenant complains they get evicted.
    Another silly govt idea.
    It will neverhappen.