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London Rents Are Rising and It’s All My Fault.

Excited for my medical terminology class today...

Photo credit: LibraryatNight

I was ill – I caught a debilitating disease for which the medical term is Domii Pauci – my G.P. identified the problem and got me an appointment with a specialist who had devoted his life to curing people with this complaint. I prepared a wet fish, and finally the day came for my appointment and I marched into his surgery and announced:

“You bloodsucking leech! How can you live off the misery of your patients! How dare you sit in your comfortable surgery, taking taxpayers money? I am going to make sure that you never practise medicine again! Then I hit him round the face with a wet fish. I don’t think we will see HIM in surgery again!

At least that was the message that I got from today’s Independent in their story:

A new era of house building could create jobs, stimulate growth, and help the poor. So why won’t Cameron do it?

It’s a great story with a lousy message.

Yes there is a problem, especially in London: a modest two-bedroom place in London’s Zone 2 – a standard monthly rent is indeed £800, even £900. The Independent reports hundreds of furious Londoners bombarding with their renting horror stories. One had a 35 per cent rent hike imposed on them at Christmas; another was forced to desert their Stockwell flat after a 40 per cent increase. “My tiny flat in the East End went up by £200 a month for the next occupants when I left”. Clearly the patient is sick, sick with Domii Pauci – a housing shortage.

The Independent’s solution is the wet fish: “Private landlords can do as they please, of course. Having a roof over your head is a basic human requirement and, when there is a lack of houses to go around, it is a need that can be exploited. A landlord knows that, if their tenants don’t like an outrageous rent hike, their only option is to put themselves back at the mercy of the ever more pricey private renting market. According to Shelter, annual rents in inner London went up by 7 per cent last year – or just under £1,000 for a two-bedroom house. When people’s wages are flat-lining, that’s a big hit.”

As a Landlord of some 20 years I have seen this coming, indeed it’s why I am a Landlord. The strange thing is that the Government hasn’t seen it coming, and still doesn’t understand why it is happening, and getting worse. The fixed costs of being a Landlord are increasing exponentially – Pimlico Flats has had to take on an employee solely for the purpose of administering deposits, council tax, utilities. Computerisation has enabled big corporations like Westminster City Council to remove thinking from their activities and leave automated mailshots. New regulations require building work to prevent such things as “death by only having one lock” ……. again, many of the new initiatives are good, and contribute to tenants well being, but some don’t. And all carry a cost, and at the end of the day the tenant bears that cost,  not government, or the landlord.

It’s time for Government and Shelter to examine what leads to higher rents, and what leads to lower rents, and to act accordingly.

Meantime don’t be surprised if Landlords leave the Planet saying thanks for all the fish.


 

Right to Buy hits Pimlico Rents for Westminster Council

Margaret Thatcher

Margaret Thatcher

An interesting article today in Social Housing and Local Government news website http://www.24dash.com about how Right To Buy has affected Westminster Council.

Nearly half of Westminster’s 22,000 council homes have been sold through Right-to-Buy in the past 30 years, and because government rules don’t allow local authorities to keep the proceeds of sale the properties haven’t been replaced by further social housing. Of course many of the flats purchased under Rent to Buy have been recycled into Private Sector renting – I personally know of 4 people who were able to retire to the country in middle age on the proceeds of the Right to Buy windfall which could be as much as several hundred thousand pounds in extreme cases.

This has left the council with a situation where they are paying housing benefit to tenants who are renting ex-council properties from private landlords – and this costs the council around four times the rent charged for a council home rented directly from the council, and on occasions up to five or six times the council rent.

What a mess – but probably not a mess that the government wishes to acknowledge as it stems from a conservative policy a generation ago, rather than something that can be neatly pinned on the last government.

Books on Property

‘Successful Property Letting – How To Make Money In Buy-To-Let’ by David Lawrenson 


If you are only ever going to by one authoritative book on being a landlord then judging by it’s track record this is the one to buy.

Best treated as a reference for specific topics rather than trying to read it from cover to cover, it has lots of references for where to get further information.

It also provides quite specific advice, clearly from experience, on many things and represents excellent value and written to be understood.

Unpretentious, unassuming style a ‘must’ for all Property Landlords.



 ’The Complete Guide to Residential Letting’ by Tessa Shepperson 



Written by a legal authority it is the ultimate in being right.




Tessa runs a legal online advisory service for her members, and has produced an authoritative book for landlords (from professionals with large rental portfolios to people letting rooms in their home), which covers everything landlords need to know in a clear, easy to understand style.



‘The Complete Guide to Property Investing Success’ by Angela Bryant


You often hear about people who have built up a substantial property portfolio and are now, or on their way to being financially independent. This book will help you make the move to becoming a property investor. Written in an easy-to-read style the author clearly sets out the steps to take and the pitfalls to watch out for.

The author has demonstrated that her and her husband have learned the hard and this brings credibility to the information and tips she shares. The personal stories bring an added dimension to the book.

As well as a ‘how to’ element to the book there is also a self motivation section to encourage you to start on the journey to becoming a property investor.



Leading From The Front, Gerald Ronson

Above all this is a Property Story. Amazingly for a man who now holds an iconic status in British business, Ronson quit school before his 15th birthday to work with his father in the family’s furniture factory, and as a young man he and his friends were street fighters, using their fists to take on the British fascist movement. This propelled into a role as a leader in the country’s Jewish community, and he is now considered to b the most influential secular Jew in the UK.

Ronson will forever be associated with the famous Guinness affair, which was the biggest financial scandal of the ’80s. He was found guilty after a media circus of a trial in which the cards were stacked against him and he spent six months in jail. Years later, the European Court of Human Rights in Strasbourg ruled that it had been an unfair trial. True to character, he organised his life in prison, tried to assist his fellow inmates and has since helped many of them find their way back into society.

After Guinness, which Ronson calls the greatest crisis in his life, he suffered a major financial crash that nearly bankrupted him, and he has spent the last two decades rebuilding his empire and reputation.

In For A Penny, Peter Hargreaves

In this candid and outspoken book, the multi-millionaire founder of investment company Hargreaves Lansdown tells the story behind its extraordinary success and gives his forthright views on what it takes to be successful as an entrepreneur and as an investor. Starting from his spare bedroom with a single phone and borrowed office equipment, Peter and his business partner Stephen Lansdown set out to build a business that would consciously be different from that of all their competitors. They have held fast to their unconventional ways ever since, regularly turning the companyâ TMs strategy and business model upside down in their relentless effort to give their clients the best information, the best prices and the best service. Widely recognised as the number one firm in their business, Hargreaves Lansdown was floated on the London stock market in 2007, valued at £800 million. – a great book on investment, building a business / brand and looking after your clients.

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