Have you ever been embarrassed to admit you’re a landlord? If so, you’re not alone! Despite the promises made in numerous speeches, budgets and TV appearances, it seems that the government is having a bit of trouble setting the foundations of their promise to build 200,000 starter homes. The Housing Bill, in which the plans are outlined, has continued to be rejected by MPs in the House of Commons, after Amendments were made in the House of Lords.
If these changes continue to volley back and forth, the government’s desire to have the bill passed and become law by the end of this current parliamentary session will be a non-starter.
Thousands of eager first time buyers are continuing to hold off taking their first step onto the property ladder, with the promise of plenty of shiny new homes on the horizon - and continuing to rent whilst they wait.
On paper, this delay could be good news for landlords, however, what are the back stories behind the headlines?
Pay to Stay plans capped by Lords
The House of Lords were in favour of higher rents for people with a household income of £31,000 or more (£40,000 in London), having initially voted to soften the impact of so-called 'Pay to Stay' plans, which would see council tenants in England paying higher rents.
The plans gave landlords in England the discretion to charge market (or near market) rents to social tenants with an income of £60,000 or more a year. It was argued that high income families should not be paying social rents when they could afford to pay more.
On the return of the bill to the Commons, MPs have now conceded that the minimum income threshold would rise in line with inflation every year, while the increases would come into force more gradually, at 15% rather than 20%.
With Pay to Stay rent increases a hot topic for many of the private landlords who let to social tenants, it’s important that this section of the Housing Act is decided upon. With 1,497,893 housing benefit claimants in the UK reliant on the private lettings market, the system is reliant on private landlords, and as long as they are supported, they will continue to support the system.
Right to Buy comes under scrutiny
The Lords also wanted guaranteed that high value properties sold off by councils to fund the government's plans to extend Right to Buy to housing association tenants in England would be replaced by similar homes in the same area, amid fears that long-standing residents who are not in a position to take advantage of the Right to Buy scheme would be driven out of the areas that they have called home for years. They backed calls to give councils more room to consider alternative sources of affordable housing while allowing them to keep part of the money when they sell off high value homes
The Lords may now have to accept defeat on this amendment after it was rejected by MPs.
With many existing local authority tenants taking the opportunity to buy their existing homes, it is possible that private landlords may find that they are called upon to fill the void.
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