Post UK Election – Two Impacts of Renting Property

Video Transcription:

Hi, guys. So, Tory majority and its effect on lettings, and actually landlords and how we're going to be letting our properties and that sort of thing and what really is in the manifesto. The interesting thing with the manifesto, there wasn't a lot on housing. Really the focus was on Brexit and getting Brexit done as they say. And I think that's going to continue to be certainly the focus for the next three months to get it done and then March when the budget comes out, I think really that's going to be when we're really going to start to see the focus come away from Brexit. Not really, I think that's going to dominate for the whole year, but I think we're going to see other policies coming, though.

Really there's two probably main things that are on the table right now, one is the tenant's passport for the tenancy deposit. I don't have a problem with that. In fact, it actually makes things easier. Half the time we're paying it from them, back to them and back into them. So I don't think that really matters. The only question that they haven't really answered is, what happens if there's deductions to be made from that. And some of those times, you can get into an argument and then you've got to go to arbitration. That can take, six, eight weeks. What happens in that interim period? Are they getting the money back, are they not getting the money back? So there are the questions and this is where the manifesto was very light on detail and everyone's been very light on detail on this sort of thing. So that's the passport thing, that's one thing.

The second thing is really the section 21, which is the no fault eviction, which basically says landlord says, I want you to move out of the apartment because I need it for whatever reason. I don't need to give a reason, and abolishing that. It's been popular on both parties because if you think about it, a fifth of the world, a fifth of the world's population... Sorry, a fifth of the UK population now rent, and when you're thinking about 73% of under 35s rent now. It's a huge percentage and they're really struggling to get on the thing. Things that help to buy really helped first time buyers get on the thing and that's been a fantastic... And I 100% agree with that. Having a two tier system where you help people get their first home, but by the same time you have a free market that allows... it's allowed to go up and down is it free as the market dictates is really important.

I think the Tories have always been focused on having these price increases because that's... we'll pander there or support their voters. But remember a lot of their voters now are ex-Labour. So it's going to be an interesting thing to see how they tread the middle ground with this, and I think what we're going to see is, I hope anyway, positive things happening, building more properties, but also looking after renters that want to get on the ladder through things like right to buy and help to buy. But also things that bolster up that whole lettings and rental thing. I think one of the things that people are really missing out, and politicians are really missing is that we have an expectation, there's always been an expectation in politicians that everybody wants to own property.

But the amazing thing is, I've got so many friends now that actually never want to rent. They're happy... Sorry, never want to own a property. They're happy to rent. They're happy to have the freedom to be able to move. They're happy to... No interest in owning assets. Even cars, they Uber everywhere, so this share economy is really taking hold and I don't think politicians have really grasped what that means for housing. I think the housing market has responded really well. So things like HMOs, house with multiple occupancies, and even things like in developers now where rather than having a big bedroom and a small bedroom, they're putting two equal sized bedrooms, designed for sharing for parties that aren't families that don't know each other. So things like this, the market is of its own choice making these adjustments.

I'm not sure the politicians are. I think the politicians are being... They're almost holding onto the old rather than embracing... I think at some point there's a reckoning that has to happen. And I think unfortunately right now what's happening is, it's really been vilification of the landlords where it's actually most... In fact there's very few landlords that I know who I think, you're an unscrupulous landlord. You're getting rid of people when they don't deserve it or when you don't need to or just for the sake of it. It doesn't really happen. So this whole section 21 no fault eviction, really most of the time we use that is when something is wrong and the current system of section eight takes too long, is useless.

It's unfortunate that even with this section 21 they're talking about abolishing and that's the headline, but there's very little detail gone into... And in the manifesto, there's no mention of funding legal services, no mention of bolstering up the landlord's rights to have a property that they can actually work with. Because the problem is, there's always a focus on the renter and their rights. But what about the person who's got a mortgage? I've got kids, I've got all this sort of property. If that person doesn't pay their rent, that affects my ability to pay my mortgage, which can affect my credit, which can affect everything. But there's not much to talk about that. So I think at some point there's going to be a reckoning. I think we've got to really come to terms with the new economy that we're in. We're seeing a lot of changes now, we're seeing in America with the politics over there, universal basic income and these concepts which were once far out there are coming onto center stage now. I think that's really important.

In terms of renting, besides the section 21, there's not a lot. So until we get any detail, who knows what's going to happen there. It may turn out to be actually fantastic. If they take away section 21 and bolster up the ability to remove somebody, then I don't have a problem with that. My concern is if they do a botched job like they have been, which is they announce this policy and they don't really put any resourcing or funding behind it and they try and put people into the existing section eight system, which is failing dismally from my perspective. We have so many cases where section eight is not fit for purpose. There's no funding, it takes so long to do, the judges will give so many accommodations to the tenant and their human rights.

Forget about the landlord's human rights. It's almost like the whole system is broken and there's no funding towards it. It's not the judges necessarily. The judges are ruling according to how they have to rule. It's the caselaw, it's how things are approached. It's the documents that go missing. It's the fact that... The vilification of landlords and the fines and that that are attached and the punitive measures that are placed upon them, which actually is disproportionate. But anyway, enough about that. It's a bit of a rant, but the bottom line is, the Tories getting in is good news for you as a property investor. Actually I think... what we're going to see is this year, 2020 is going to be quite a good year for property now.

Now we've got some government majority, we haven't had a working majority for three and half years, we have now, that's great. Brexit will be done, which at the end of the day, whichever side you fall on, the fact is, having certainty is more important than having no certainty whatsoever, and I think that will really start to show next year as we have the spring bounce in sort of March, April, May sort of thing. I think really we're going to see a decent property market next year, so good news for that. All right guys, have a great day. Live with passion. Speak to you real soon. Remember, subscribe. Any questions you've got, put them into the comment section. All right, guys. See you. Bye.

Brett Alegre-Wood
December 19, 2019

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