Amount spent by private renters is approaching parity with mortgage payments(independent.co.uk)
independent.co.uk
Amount spent by private renters is approaching parity with mortgage payments
https://www.independent.co.uk/news/uk/home-news/rentquake-private-housing-crises-shelter-report-a8401131.html
55 comments
> In a free market, rent will always be higher than cost of a property. If it were less, the property is an unprofitable investment and should be divested.
That's assuming you finance your property with debt and let someone else pay for your debt. If you either happen to own a property you don't use, or own the property you live in, it makes perfect sense.
You're describing everything that's wrong about the property market: owner expecting properties to magically create money out of someone else's labour.
That's assuming you finance your property with debt and let someone else pay for your debt. If you either happen to own a property you don't use, or own the property you live in, it makes perfect sense.
You're describing everything that's wrong about the property market: owner expecting properties to magically create money out of someone else's labour.
I’m not sure that’s anything other than math.
If I have a property and I decide to rent it, why would I rent it for anything less than the sum of my expenses plus a profit margin that will cover maintenance or repairs?
Why would anyone else? A rental property is just like any other business.
If I have a property and I decide to rent it, why would I rent it for anything less than the sum of my expenses plus a profit margin that will cover maintenance or repairs?
Why would anyone else? A rental property is just like any other business.
That's absolutely correct, my point was that once you've done the math - and assuming you are still paying a mortgage - it should give you a rent high enough such that no-one would agree to take it, unless you are willing to keep paying for part of it. It would therefore push the owner to either sell or stay in their property.
That's my blue-sky-point-of-view of the property market which doesn't reflect the reality, but I believe with enough people treating property as an investment rather than a personal need you end up in our current situation.
My personal view is that tax systems should compensate by being more expensive to own more properties than you need. (where to put a limit, I'm not sure)
That's my blue-sky-point-of-view of the property market which doesn't reflect the reality, but I believe with enough people treating property as an investment rather than a personal need you end up in our current situation.
My personal view is that tax systems should compensate by being more expensive to own more properties than you need. (where to put a limit, I'm not sure)
The rent is higher but people will still take it for a lot of reasons. Inability to get approved for a mortgage, not wanting to deal with the sales process if you expect to move around a lot, etc.
I tried to sell my old house and despite being priced low just to get it sold, it sat on the market after we had already moved. We ended up deciding to see if we could rent it but weren’t sure how the process would go. In our area we didn’t see any home rentals listed except for a couple that were excessive (double what a mortgage would cost).
After months of not selling, we listed it for rent at a price I thought nobody would pay and it rented in 1 day, sight unseen. The renters insisted on paying a deposit as soon as possible because they didn’t want to lose the property.
For a first dip into the home rental market, I was shocked at how high the demand was.
I tried to sell my old house and despite being priced low just to get it sold, it sat on the market after we had already moved. We ended up deciding to see if we could rent it but weren’t sure how the process would go. In our area we didn’t see any home rentals listed except for a couple that were excessive (double what a mortgage would cost).
After months of not selling, we listed it for rent at a price I thought nobody would pay and it rented in 1 day, sight unseen. The renters insisted on paying a deposit as soon as possible because they didn’t want to lose the property.
For a first dip into the home rental market, I was shocked at how high the demand was.
Would you agree that when evaluating the housing market, we should take into account the full context of the decision to rent or buy, including the positives of renting and the negatives of ownership?
To reduce your losses.
Consider a landlord that stupidly overpays for a property. The market isn't going to cry about the landlord not being able to charge rent that covers their expenses.
Consider a landlord that stupidly overpays for a property. The market isn't going to cry about the landlord not being able to charge rent that covers their expenses.
The price is fixed by supply and demand. If you don’t want to rent it for anything less than X, what are you going to do if you don’t find anyone willing to pay that much?
Other people may want to rent their properties for less for multiple reasons, including that the sum of their expenses may be less than yours.
In any other business, it’s not necessarily the case that your revenue covers your costs. Unprofitable businesses exist (and may be even “expected” in cyclical sectors).
Other people may want to rent their properties for less for multiple reasons, including that the sum of their expenses may be less than yours.
In any other business, it’s not necessarily the case that your revenue covers your costs. Unprofitable businesses exist (and may be even “expected” in cyclical sectors).
You could still rent for X where maintenance < X < maintenance+mortgage, because once the house is paid off, you start getting profit. It may be a risky plan, but if you don't need cash straight away, or if you bought the house to downsize in your future, it's not a terrible plan either.
> why would I rent it for anything less than the sum of my expenses plus a profit margin that will cover maintenance or repairs?
> Why would anyone else? A rental property is just like any other business.
You're absolutely right if your financial and strategical planning only sees up to the next quarter.
> Why would anyone else? A rental property is just like any other business.
You're absolutely right if your financial and strategical planning only sees up to the next quarter.
Let's say I look 10 years into the future. How does that change anything?
How much can real estate appreciate in 10 years again? (though it can definitely depreciate, but depends on its current situation).
Also its future value may depend on how you're renting it currently. (Or even if your overcharging for rent and the property is empty because you are waiting for "the perfect tenant")
You're also assuming buying and selling property is frictionless.
If your equity is negative it might be better (or even be the only alternative) to rent it at a below mortgage cost to have fewer losses.
Also its future value may depend on how you're renting it currently. (Or even if your overcharging for rent and the property is empty because you are waiting for "the perfect tenant")
You're also assuming buying and selling property is frictionless.
If your equity is negative it might be better (or even be the only alternative) to rent it at a below mortgage cost to have fewer losses.
Wait, I'm not sure what you're arguing here. The GP said that houses rent for expenses plus profit. I can't quite tell if he meant to delineate that to strictly rental income, but I understood it as meaning 'a land lord prices his property (the rent of a property, of course) so that he will make back his expenses, plus a profit, over the expected ownership time span'. So that includes things like expected appreciation, any tax benefits etc.
Is that what you are saying too? Because then there isn't much of an argument here :) I thought what you meant to say was that there is some factor other than financial that comes into play (or should come into play) when determining a rental price.
Is that what you are saying too? Because then there isn't much of an argument here :) I thought what you meant to say was that there is some factor other than financial that comes into play (or should come into play) when determining a rental price.
Housing is a consumable good, not an investment. That homes appreciate is a symptom that reveals the catastrophic government policies imposed on the market.
In a free market, homes would be very unlikely to appreciate in value. Indeed, they would be much more likely to depreciate as they degrade and fall technologically behind.
In a free market, homes would be very unlikely to appreciate in value. Indeed, they would be much more likely to depreciate as they degrade and fall technologically behind.
Should an airline let a seat fly empty, or accept a price that’s less than the cost plus profit of the seat?
That's a slightly different game, because the SAME airline sells hundreds (usually thousands) of seats per day, and there's a lot of signaling involved.
A route I (used to) fly frequently has two competing airlines, one of which raises the price towards the flight date even if they have free seats (they bank on you willing to pay a premium for a next-day unplanned flight), the other lowers the price towards the flight date if they still have free seats (they don't want to fly empty). The former does much better financially than the latter, although I cannot tell if that's the only reason.
But a house owner sells/rents out once in 5-10 years, and never to a repeat audience; So money is all that matters, signaling doesn't.
A route I (used to) fly frequently has two competing airlines, one of which raises the price towards the flight date even if they have free seats (they bank on you willing to pay a premium for a next-day unplanned flight), the other lowers the price towards the flight date if they still have free seats (they don't want to fly empty). The former does much better financially than the latter, although I cannot tell if that's the only reason.
But a house owner sells/rents out once in 5-10 years, and never to a repeat audience; So money is all that matters, signaling doesn't.
The general principle here is that, everything else being equal, if the marginal revenue exceeds marginal cost (i.e. revenue is greater than variable costs), you should make the sale. This is because you will lose less money than if you hadn’t made the sale.
Note however that airline pricing is notoriously difficult. There is no single price at which an airline may be flown profitably. It is an astounding achievement that the industry functions at all.
Note however that airline pricing is notoriously difficult. There is no single price at which an airline may be flown profitably. It is an astounding achievement that the industry functions at all.
> That's assuming you finance your property with debt and let someone else pay for your debt. If you either happen to own a property you don't use, or own the property you live in, it makes perfect sense.
If you happen to own a property, but not use it, then you can either:
a) rent it out, or
b) sell it, and invest your proceeds according to your preferred risk/reward preferences.
In an efficient free market, for similar risk you get similar reward; So, if the reward for real-estate is 3% with essentially no risk, you're generally able to get the same thing by selling and putting the money in bank / low risk stock portfolio.
Alternatively, if you can't get 3% in other places, everyone will look to buy houses and rent them out (as an investment) in order to get those 3%. That's why the risk/reward profile equalizes across asset classes.
What GP was describing is basic math and economics. The existing state of ownership only matters in the sense that changing it introduces economic friction (ownership deduction, property transfer taxes, title transfer, realtor and lawyer fees, etc). Other than that, it's just math.
If you happen to own a property, but not use it, then you can either:
a) rent it out, or
b) sell it, and invest your proceeds according to your preferred risk/reward preferences.
In an efficient free market, for similar risk you get similar reward; So, if the reward for real-estate is 3% with essentially no risk, you're generally able to get the same thing by selling and putting the money in bank / low risk stock portfolio.
Alternatively, if you can't get 3% in other places, everyone will look to buy houses and rent them out (as an investment) in order to get those 3%. That's why the risk/reward profile equalizes across asset classes.
What GP was describing is basic math and economics. The existing state of ownership only matters in the sense that changing it introduces economic friction (ownership deduction, property transfer taxes, title transfer, realtor and lawyer fees, etc). Other than that, it's just math.
The concepts of “cost of capital” and “opportunity cost” account for the scenarios you describe.
Money has a price. If you want to borrow money, you pay interest. If you have uninvested money, you forego interest and suffer inflation. If you have investors’ funds, that has a cost too. The combined costs of your various sources of money are your cost of capital. Investments are only economically profitable if they make more than the cost of capital. It is quite common to earn an accounting profit but suffer an actual economic loss.
If you own property you don’t use, then, assuming you aren’t enjoying some offsetting non-pecuniary benefit, you are suffering an economic loss. You would be better off selling that property so that you can reallocate your capital to a productive purpose.
Money has a price. If you want to borrow money, you pay interest. If you have uninvested money, you forego interest and suffer inflation. If you have investors’ funds, that has a cost too. The combined costs of your various sources of money are your cost of capital. Investments are only economically profitable if they make more than the cost of capital. It is quite common to earn an accounting profit but suffer an actual economic loss.
If you own property you don’t use, then, assuming you aren’t enjoying some offsetting non-pecuniary benefit, you are suffering an economic loss. You would be better off selling that property so that you can reallocate your capital to a productive purpose.
The article isn't talking about disparity between rents and mortgages.
It's saying the total amount being paid in rent is approaching the total amount paid in mortgage payments. I'm not sure what that proves other than far more people are renting than previously.
This needn't even be a problem, inherently. It's just that renting is often a miserable experience in the UK, and people are having to spend far too much of their income on it, which is setting us up for all sorts of societal problems in the future.
It's saying the total amount being paid in rent is approaching the total amount paid in mortgage payments. I'm not sure what that proves other than far more people are renting than previously.
This needn't even be a problem, inherently. It's just that renting is often a miserable experience in the UK, and people are having to spend far too much of their income on it, which is setting us up for all sorts of societal problems in the future.
> people are having to spend far too much of their income on it [rent], which is setting us up for all sorts of societal problems in the future.
I wonder what the long term effects of this will be. When no one has any savings and no house when they retire, and all of a sudden have to live on a very small pension (which if the trends [1] are anything to go by may all collapse) what are people going to do?
[1] https://www.forbes.com/consent/?toURL=https://www.forbes.com...
I wonder what the long term effects of this will be. When no one has any savings and no house when they retire, and all of a sudden have to live on a very small pension (which if the trends [1] are anything to go by may all collapse) what are people going to do?
[1] https://www.forbes.com/consent/?toURL=https://www.forbes.com...
Exactly. I expect a lot of people will decide to move to a cheaper part of the EU where their meagre pension will go further. Hey wait a minute...
This is happening right now. I don't have any statistics, but I've seen TV reports (i.e., anecdata) about German retirees moving to Romania or Bulgaria. The biggest issue for them is that they only know German, and the locals in their age class only know their own native tongue. Maybe when people from my generation need to do the same in the future, it will be easier for them because English fluency is/will be more widespread by then.
EDIT: Would be interesting to see how this might affect the economy at large when this gets widespread. There already are quite significant transfers of purchase power across borders within the EU, e.g. (IIRC) the main income source in the Republic of Kosovo is family members working in richer parts of the EU and sending money home. Retirees who receive their pensions from the rich countries, but spend it in the poor countries where they relocate to, would serve as another force in the same direction.
EDIT: Would be interesting to see how this might affect the economy at large when this gets widespread. There already are quite significant transfers of purchase power across borders within the EU, e.g. (IIRC) the main income source in the Republic of Kosovo is family members working in richer parts of the EU and sending money home. Retirees who receive their pensions from the rich countries, but spend it in the poor countries where they relocate to, would serve as another force in the same direction.
I moved to England less than a year ago, and out of all the countries where I have rented, this is my worst experience so far.
Ignoring the poor treatment received by letting agencies, the landscape of property ownership is grim for newcomers. My salary puts me comfortably in the top 5% of the country earners, yet I spend about one third of it renting a tiny studio in town. We would need my partner to make above average salary to afford a modest 2 bedroom flat in town, or to be on my same payscale to be able to afford one of those terraced houses that we usually associate with middle class.
Don't get me wrong, I know I'm privileged, for me this data is just a symptom of the economic divide that this country is undergoing. If I can hardly afford to get into the property ladder, what should those in lower brackets expect? Will there be an increasing difference between those that own multiple properties and those who will be forced to rent all their lives?
Ignoring the poor treatment received by letting agencies, the landscape of property ownership is grim for newcomers. My salary puts me comfortably in the top 5% of the country earners, yet I spend about one third of it renting a tiny studio in town. We would need my partner to make above average salary to afford a modest 2 bedroom flat in town, or to be on my same payscale to be able to afford one of those terraced houses that we usually associate with middle class.
Don't get me wrong, I know I'm privileged, for me this data is just a symptom of the economic divide that this country is undergoing. If I can hardly afford to get into the property ladder, what should those in lower brackets expect? Will there be an increasing difference between those that own multiple properties and those who will be forced to rent all their lives?
> In a free market, rent will always be higher than cost of a property. If it were less, the property is an unprofitable investment and should be divested.
perhaps this might be true asymptotically in a sufficiently-qualified rational, efficient, spherical, theoretical market. also, a market where tax laws don't give preferential treatment to renting or buying.
i'm currently renting in one of australia's major cities, the gross rental yield of this place would be something like 3% before subtracting costs (council rates, maintenance, interest, property management fees, insurance).
perhaps this might be true asymptotically in a sufficiently-qualified rational, efficient, spherical, theoretical market. also, a market where tax laws don't give preferential treatment to renting or buying.
i'm currently renting in one of australia's major cities, the gross rental yield of this place would be something like 3% before subtracting costs (council rates, maintenance, interest, property management fees, insurance).
That's only true if you're looking at the overall cost vs. investment profile, but I'm not entirely sure that's the point.
Renting out a property that you own can still be a long-term beneficial investment so long as the rental costs exceed the costs of borrowing on a mortgage – and that's typically much, much lower than the value of the actual mortgage payments being made. Capital growth potential is a valid reason that people may choose to invest in property, and in a market where there are many rental properties to choose from it's quite possible that rents remain below the prevailing capital repayment + interest that a mortgage would require.
But really it's hard to understand exactly what the point being made in this article is – it seems to be primarily that the "total amount" of rent being paid is now approaching parity with the "total amount" of payments being made by homeowners. I can't tell if that includes capital repayments, or if it's even accounting for an increase in renters vs. homeowners. There's basically no useful information there.
Renting out a property that you own can still be a long-term beneficial investment so long as the rental costs exceed the costs of borrowing on a mortgage – and that's typically much, much lower than the value of the actual mortgage payments being made. Capital growth potential is a valid reason that people may choose to invest in property, and in a market where there are many rental properties to choose from it's quite possible that rents remain below the prevailing capital repayment + interest that a mortgage would require.
But really it's hard to understand exactly what the point being made in this article is – it seems to be primarily that the "total amount" of rent being paid is now approaching parity with the "total amount" of payments being made by homeowners. I can't tell if that includes capital repayments, or if it's even accounting for an increase in renters vs. homeowners. There's basically no useful information there.
>In a free market, rent will always be higher than cost of a property.
...In the long run, and on average.
Economic "laws" aren't ironclad; people are free to make all kinds of poor decisions, and they do. This is the foundation of the parable of the economist walking down the street and refusing to pick up the $20 bill, because if it were real, someone already would have.
We know how things should work, but they often don't. That's what is interesting.
...In the long run, and on average.
Economic "laws" aren't ironclad; people are free to make all kinds of poor decisions, and they do. This is the foundation of the parable of the economist walking down the street and refusing to pick up the $20 bill, because if it were real, someone already would have.
We know how things should work, but they often don't. That's what is interesting.
That really depends on the Tax laws in the area you are looking at.
Negative gains will help reduce the cost of the investment, and if you take capital gains fueled by the increase in population into account, it can be highly profitable. Even when rent doesn't cover the whole mortgage payment.
I think this only due to the fact that most owners equate mortgage payment to rent.
If you properly account for running costs, depreciation and capital cost then renting "should" cost about the same as ownership.
If you properly account for running costs, depreciation and capital cost then renting "should" cost about the same as ownership.
Approaching? I could already save about 1/3 of my monthly payments by getting a mortgage instead. The only issue is the deposit to get the mortgage, it's hard to save up enough money as it is.
But the deposit is a massive issue. If you put that deposit into stocks and shares (a diversified portfolio) you could (will probably) find that outperform the cost of your mortgage and maintenance together. If they could get rid of the deposit you might break even with a stocks and shares investment plan.
https://www.thebalance.com/real-estate-vs-stocks-which-is-th...
https://www.thebalance.com/real-estate-vs-stocks-which-is-th...
Are you advocating for zero money down mortgages?
That’s what causes market crashes.
That’s what causes market crashes.
it's likely suggested as an obvious thought experiment to help define a lower bound / upper bound versus alternative, not a policy recommendation.
In the Netherlands you used to be able to get a 105 percent mortgage, so you could finance the notary, transfer tax, mortgage advisor and so on. Nowadays it is at 100 percent and you have to pay for those services out of pocket.
No! He is advocating that 'mortage payment' != 'rent'
Costs to own roof over your head are in reality: mortgage + running costs + depreciation + cost of capital
Costs to own roof over your head are in reality: mortgage + running costs + depreciation + cost of capital
Technically, it's the inability of the payer to pay the mortgage that causes market crashes.
If you had an oracle that could predict with 99% certainty whether a given housebuyer would make a certain size of mortgage payments, you could afford to lend them that amount no matter the size of the down-payment, with a 1% risk premium over your interest rate.
We don't have such an oracle, so we look for other signs. One of the signs of financial stability is the ability to pay a large fraction of the price in advance.
If you had an oracle that could predict with 99% certainty whether a given housebuyer would make a certain size of mortgage payments, you could afford to lend them that amount no matter the size of the down-payment, with a 1% risk premium over your interest rate.
We don't have such an oracle, so we look for other signs. One of the signs of financial stability is the ability to pay a large fraction of the price in advance.
Sounds more like advocating for renting.
What isn't mentioned in this article is any commentary regarding the falling rates of home ownership in various countries compounded with rapid price increases (driven by low rates and zoning policies). This is particularly acute as it appears to be driven predominately by a generational gap as opposed to a socio-economic gap. Pitting the young against the old is never a good thing.
What is also missed completely is the rise of the professional share house. How many professional people on high incomes are now forced into multi-person rental accommodation due to affordability concerns.
What is also missed completely is the rise of the professional share house. How many professional people on high incomes are now forced into multi-person rental accommodation due to affordability concerns.
That's assuming that people rent because they cannot afford a house. I rent because I don't want a house. Owning a house is a ton of additional responsibility for what would be very little to no gain for me. I don't have space requirements (no children and don't plan to have any, no spacious hobby that would require a workshop, no car that would need to be parked in a garage). I'm not saying that everyone is like me, but I'm pretty confident there are more people like me than there used to be.
I am in complete agreement with you, I rent for very similar reasons.
What I was attempting to flag was that for many this was no longer about it being a choice. The dramatic rise in house prices has meant that saving a deposit is now a lengthy endeavour in many areas, one that is driving a much larger renter culture. It is to be expected that lifestyle norms will change around this as well.
What I was attempting to flag was that for many this was no longer about it being a choice. The dramatic rise in house prices has meant that saving a deposit is now a lengthy endeavour in many areas, one that is driving a much larger renter culture. It is to be expected that lifestyle norms will change around this as well.
The proposals laid out by politicians in the article, bear no sense of the hidden costs of zoning :-(
Anecdotal: Visited a friend in London a while ago, she bought her terrace "house" (2 stories, a width of 5 meters) for 500k GBP in Wimbledon. The condition of that thing screamed "landmarked" and "dump" at the same time, while all I heard was "artificial scarcity"...
Anecdotal: Visited a friend in London a while ago, she bought her terrace "house" (2 stories, a width of 5 meters) for 500k GBP in Wimbledon. The condition of that thing screamed "landmarked" and "dump" at the same time, while all I heard was "artificial scarcity"...
The UK has a problem with housing supply, which will take time to fix.
But what needs to happen urgently (and could happen virtually overnight if politicians wanted it to) is that renting needs to be made slightly less awful.
Renting a home is no longer something that people do for a few years while they're young. Many will be doing it for life, and the rules need to change accordingly.
Some ideas:
- A total ban on any agent's fees being charged to the tenant (already happened in Scotland, and been promised to the rest of the UK for months now).
- A year's notice before you can evict someone from a home. (unless they are not paying rent / trashing the place)
- A year's notice before increasing the rent.
- Some sort of government body that forces landlords to conduct repairs to a high standard, and obliges them to pay for alternative accommodation if the property isn't fixed.
But what needs to happen urgently (and could happen virtually overnight if politicians wanted it to) is that renting needs to be made slightly less awful.
Renting a home is no longer something that people do for a few years while they're young. Many will be doing it for life, and the rules need to change accordingly.
Some ideas:
- A total ban on any agent's fees being charged to the tenant (already happened in Scotland, and been promised to the rest of the UK for months now).
- A year's notice before you can evict someone from a home. (unless they are not paying rent / trashing the place)
- A year's notice before increasing the rent.
- Some sort of government body that forces landlords to conduct repairs to a high standard, and obliges them to pay for alternative accommodation if the property isn't fixed.
Eh, for what it's worth it seems like making life terrible for landlords is a good way to convince the there's no point bothering with tenants, and thereby reduce the housing supply.
We've tried that in Ireland - I'm the beneficiary of Rent Pressure Zones in Dublin and I think they're incredibly dumb; if you want more housing don't try your hardest to convince all the people thinking "hmm, should we rent Grandma's unit that's been vacant in Rialto since she died 10 years ago" that it's a terrible idea!
We've tried that in Ireland - I'm the beneficiary of Rent Pressure Zones in Dublin and I think they're incredibly dumb; if you want more housing don't try your hardest to convince all the people thinking "hmm, should we rent Grandma's unit that's been vacant in Rialto since she died 10 years ago" that it's a terrible idea!
Houses don't suddenly cease to exist when they are withdrawn from rental stock. For small and large landlords they would want to dispose of the asset as it's costing them money.
It's the inverse of the problem the BTL revolution had - small landlords buying up housing stock and driving prices up.
So, house no longer for rent - it'll go on sale, which means more houses available on the market, which would depress prices. The problem is that's unpalateable to the large Tory donors, so the only way out is to build build build (and maybe see if it's possible to forbid purchase by anyone but owner-occupiers).
It's the inverse of the problem the BTL revolution had - small landlords buying up housing stock and driving prices up.
So, house no longer for rent - it'll go on sale, which means more houses available on the market, which would depress prices. The problem is that's unpalateable to the large Tory donors, so the only way out is to build build build (and maybe see if it's possible to forbid purchase by anyone but owner-occupiers).
In other words, roll back the Thatcherite "assured shorthold tenancy".
The Scottish tenancy reform already changed the ability to evict to one of a list of specified reasons: https://rentingscotland.org/landlords/eviction-grounds-for-t...
The Scottish tenancy reform already changed the ability to evict to one of a list of specified reasons: https://rentingscotland.org/landlords/eviction-grounds-for-t...
> A total ban on any agent's fees being charged to the tenant
I got around this by negotiating directly with the landlord to renew the tenancy without involving the agent. Just because the agent sends you a letter saying you owe them £90 doesn't make it true, they actually have very little power.
I got around this by negotiating directly with the landlord to renew the tenancy without involving the agent. Just because the agent sends you a letter saying you owe them £90 doesn't make it true, they actually have very little power.
The fixed term contract automatically becomes a rolling monthly contract by law, if neither side does anything. The agency can say you owe them whatever for renewal, but if neither you nor your landlord give each other the move out notice there's literally nothing you need to do, it becomes a periodic statutory contract automatically.
> But what needs to happen urgently (and could happen virtually overnight if politicians wanted it to)
Nearly 1/5 of MPs are landlords, that could be part of the problem.
Nearly 1/5 of MPs are landlords, that could be part of the problem.
These kind of regulations are essentially in place in Germany.
The problem is that people who are renting often don’t have the option of getting a mortgage in the U.K. People often rent much nicer flats than they could get a mortgage for - especially within cities. Alternatively, they’re renting flats that are non-mortgageable, and anything that the banks will provide a mortgage on is out of their affordability.
Basically - people who are renting are, in practice, stuck renting, and I suspect a lot of people can be pushed a lot harder than they are now - we’ve only seen the start of young adults continuing to live with their parents while working due to the cost of renting.
Basically - people who are renting are, in practice, stuck renting, and I suspect a lot of people can be pushed a lot harder than they are now - we’ve only seen the start of young adults continuing to live with their parents while working due to the cost of renting.
I think the only escape from going back to generational landlords (feudalism) is to have all rentals become rent to own: you live there for 5 (3?) years and can purchase that part of the building (ala condo) or duplex. You'd have to pay your share of taxes, but you would no longer be renting and would have your own property. If you go to sell it, the landlord gets first call on buying it.
This article drops critical context. 10 years ago, one of the earliest and most potent warning signs of the coming collapse was the extreme disparity between rents and mortgages. Home prices skyrocketed while rents remained relatively flat. And just a couple years before that, there were weekly newspaper articles about the unprecedented reversal of the rent-to-mortgage ratio.