Friday, 10 April 2015

The Lib Dems latest whacky proposal

Appears to be that the government will pay tenant deposits of up to £1,500 or £2,000 in London more or less directly to landlords, without asking the landlord for the money back; if they can't get the money back from the tenant, the government will just write it off.

So presumably those landlords who currently would have demanded a smaller deposit will promptly bump it up to £1,500.

See how many other holes you can spot in Clegg's logic.


James Higham said...

Why can't I get into things like that?

Bayard said...

Well, it depends how hard the government tries to get the money back. As it's the government, presumably they could hand the debt over to HMRC to extract via the PAYE system for those who don't front up the cash within the prescribed two years.

I can't see where it says they'll be handing the cash to the landlords in the linked article, though. It seems pretty straightforward to me: the loan is to the tenant, therefore the government can't ask the landlord to repay it. Why should he, if the tenant is still in residence?

Ben Jamin' said...

Could be a clever way of registering landlords for tax purposes.

Lola said...

I listened to this crapola on R4 on the way in this a.m. I must stop screaming at the radio - it doesn't do any good.

Bayard said...

BJ, sneaky! You could well be right.

Mark Wadsworth said...

B, imagine following scenario:

Landlord: "I want a £1,500 deposit"

Tenant: "But why? It's a £50 a week bedsit?"

Landlord: "I've got another viewing in ten minutes, he's sorted out the £1,500 loan, got the forms approved and everything. Do you want it or not?"

Mark Wadsworth said...

BJ, we have discussed in the pub, if TPTP wanted to track down landlords, they have more than enough info. Simple fact is, they don't want to.

In this case they will have an excuse "Oh no, we make the loans to tenants not to landlords, we find it hard enough keeping track of tenants, don't ask us to track down the landlords as well."

Curtis said...

MW @2245
That scenario won't happen, because if the second prospective has already sorted the loan and the first hasn't, he wouldn't even entertain the viewing.

This won't help landlords because they need to put the money into the "Tenancy Deposit Scheme" where they can't touch it. If the tenant can't pay it back because the landlord hasn't put it into the TDS, then it might be the government who will take action instead of the tenant having to go to court

Lastly I figure deposits as part of the rent anyway because most big landlords will make up spurious reasons to keep most of the deposit. This happens when I've gone with big agencies, small ones in many cases don't care, I've rented places where the landlord didn't bother with a deposit at all or just paid it back as soon as I returned the keys to his office, in cash.

I was thinking if I would move in with my parents in order to benefit from this loan stuff, but it's only £1500 which I can earn or lose in 1 minute every time the £ drops another US cent.

Bayard said...

"This won't help landlords because they need to put the money into the "Tenancy Deposit Scheme" where they can't touch it."

I thought that, too, but having a large deposit is good for the landlord because he can easily be two or three months' rent out of pocket before he gets his property back, not to mention any damage that a soon-to-be-evicted tenant might inflict on the property. Of course, Ricardo's rule says that the interest and repayments on the loan will be knocked off the rent anyway, as tenants factor it in to the amount they can afford for rent, so, once the £1,500 deposit gets established, it will be the landlords who will be paying for it. Following up on Mark's comment to BJ, perhaps the Lib Dems have already thought it through that far.