Starting a business from a rented property

The conservatives have an interesting new proposal, to end:

restrictions on people starting a business in social housing, to enable social tenants to become entrepreneurs

This is a great idea, and very useful.  But I fail to see why this should only apply to people in social housing.  Can we please have the same applied to the AST?

Yet another example of the invisibility of private tenants to politicians.

Security of tenure … for some

The government finally acts on security of tenure guaranteeing tenure for five years.   There is a catch: to qualify you must buy the house first and use a sale and rent back scheme.

I’m amazed at this.  Security of tenure is an important issue.  This government policy recognises security of tenure is important, but only for a certain class of people: former home owners.   When will the government see that a whole generation is having to rent.  Why should they be denied security of tenure just because they haven’t yet bought a house they cannot afford.

TUC calls for empty homes tax

The Guardian reports that the TUC want an empty homes tax.  It’s good to see that the number of empty homes in the UK getting some press.  Of course, this is a politically appealing act that would still exempt people who put in a caretaker in a vacant house, or a older person alone in a large house.  In reality the burden of taxation should be moved onto housing so that opportunity costs become explicit to those who choose to keep properties underused or empty.

The wilsons are in trouble …

says the Mail.  The pinups of buy to let in arrears?

A welfare state for home owners

Following on from the post on the welfare state for landlords, now the government wants to keep house prices high by engaging in mortgage lending.  It’s off topic, I know, but if the government felt no need to control prices on the way up then why the sudden rush to prop it up?

A welfare state for landlords

This essay is very interesting:

In terms of privately rented housing in the last 25 years, the single biggest change in housing law was effected by the Housing Act 1988. This abolished rent control from January 15th 1989 and brought in the Assured Shorthold Tenancy, the most common form of private rental agreement today. Its impact and knock on effects have been enormous. Problems with high rents, inflated housing benefit levels, high levels of tenant debt lack of security and summary repossession all derived from this piece of legislation.

And the problem of median rents isn’t even mentioned.

Should we create a oneclickorg?

I am considering using http://www.oneclickor.gs/ to open up rental rights to its constituency.  What do you think?

Tax loophole for second home owners to be closed

The EU is forcing the British government to end tax breaks on owning second homes.  Not that you’d know it looking at the headlines:

• Holiday home owners face annual ’stealth charge’ of thousands of pounds (Daily Mail)
  
• Second home owners face stealth tax in Pre-Budget Report (Telegraph)
  

This story is being reported in entirely the wrong way.  Tax breaks need to be justified, and second home owners would seem to be a unlikely lot for a break given the size of fiscal deficit we are facing.  Given that we supposedly face a housing shortage:

• Housing shortage creates underclass (Daily Mail)
• Village life under threat due to lack of affordable homes (Telegraph)

you would think removing a tax break for holiday homes might actually be a good idea that would help rural communities by reducing demand on scarce housing.   However, those journalists seem incapable of looking into even their own archives.

This is the tip of the Iceberg when it comes to the bad shape of property tax in the UK.  I recently heard of two retired couples who would rather bounce around in their huge homes for a few more years than pay the £50,000 stamp duty bill they will face when selling.  This is exactly the wrong incentive - moving house creates employment for many trades, facilitates labour mobility and allows people to free up housing that is too large for them.  Current tax policy actively discourages this. Even worse, it makes tax receipts dependent on how many people move house, which is at an all time low.   Time to tax housing properly, as it is in every other developed country.

The Conservative’s Green Paper on Housing - Nothing for Tenants

With the implosion of Gordon Brown’s government happening before our eyes, it’s worth looking at Conservative policy on the privately rented sector.  They have a green paper on their site.  It’s 40 pages and goes into some detail on the housing market.  Nevertheless, I can quite easily quote the whole part on the private rented sector as this weighs in at four paragraphs:

The private rented sector constitutes a significant component of the housing market, accounting for 13 per cent of the 22 million homes in England.Often unfairly seen as a fallback option for those who cannot afford to buy but are not sufficiently in need to qualify for social housing, the private rented sector plays a key role in meeting the accommodation needs of millions of households, many of whom greatly appreciate the flexibility and variety that the sector offers.
Yet the sector has the potential to play an even fuller and more effective part in meeting the country’s future housing needs. Private landlords could play an important role in bringing under-utilised or empty homes back into occupation. Individual landlords are also capable of delivering small developments and conversions on sites too marginal or too difficult for larger businesses to undertake. Single operators can quickly and effectively
operate at low margins on brownfield sites.
We will conduct a review of the private rented sector to examine how the sector can play an enhanced role in the housing market. As part of this review, we will look at how consistent and appropriate the current regulation of the sector is, as well as evaluating the cumulative effect of the statutory regulation on landlords.
We will look to eliminate duplication and contradiction, and ensure regulation is proportionate to risk – focusing on public safety and rogue landlords. In so doing, we will end the uncertainty Labour have created about investment in private renting, re-establishing confidence and so encouraging the provision of much needed private sector housing for rent.

There you have it.  This is by a wide margin the smallest section in the paper (energy efficiency gets four pages) and really promises only to conduct a review aimed at making investment by landlords easier.  Nothing on our favourite themes of security of tenure and long term leases.

It seems the tenant cannot expect any help from a Conservative government.

The government talks about licensing landlords

So the government is considering forcing landlords to register, and ARLA have set up a voluntary scheme:

Arla today launched its own licensing scheme to cover all its members. Member agents will be obliged to adhere to a number of requirements, including holding a professional qualification, keeping client funds in annually-audited client bank accounts, and holding valid professional indemnity insurance.

Of course, as shelter says this is ‘a step in the right direction’, but makes you realise that we’re miles from home.  Presumably, before ARLA members could previously keep funds in unaudited bank accounts.

The government scheme seems to involve a £50 license for landlords that can be revoked thereby preventing them letting the property.  The times article includes this worrying quote:

Registered landlords would have to comply with certain standards and those who fail to carry out repairs or who intimidate tenants could be struck off. If that happened, all their tenants would have to move out, although this would not happen overnight, Whitehall sources suggested

This does not seem to address any security of tenure problems, but would perhaps in the long term shake out the bad landlords.  Although, this may well put more demand on the good landlords (pushing up rents) and create a market of unlicensed landlords (good for locating illegal immigrants, skunk farms, etc).

The real problem here is that a landlord needs to be compelled to provide decent housing if they fail to, and should therefore have funds set aside in escrow in case they are needed.  This is exactly how it works for tenants.  I wonder whether landlords would welcome replacing tenants deposits with a license?