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Bill English reckons that landlords can’t raise rents

Written By: - Date published: 8:57 am, July 5th, 2017 - 51 comments
Categories: bill english, housing, national, useless - Tags: , , , ,

Last budget the government put up the accommodation supplement – against the advice of Treasury who said that landlords would capture the cash. In this context it’s useful to have some data on the current supplement:

Landlords getting accommodation supplement

Nine in 10 people getting the government accommodation supplement are passing the money on to their landlords.

Just 11 per cent of those receiving the welfare payment own their own home, according to Ministry for Social Development figures obtained by NZ Newswire.

When challenged on the budget U-turn and the risk of landlord capture the best that Steven Joyce could manage was to lamely suggest that government would be “keeping an eye” on landlords. Makes a wet bus ticket looks scary doesn’t it.

Here’s Bill English’s response to the figures above:

Mr English said the increase in the supplement would put cash directly in the pockets of tenants and denied it would be an opportunity for landlords to gouge more money on rents.

“The landlords can’t just stick up rents any time they want, although there has been pressure on rents lately,” he said.

“Tenants can have other choices.”

Tenants have other choices? Does he know anything at all about the current rental market?

Landlords can’t put up rents? What virtual reality does English inhabit?

But Mr Little said landlords can and are putting up rents, with increases for seven per cent across the country and up to 12 per cent in some cities.

We need a PM that lives in the real world.

51 comments on “Bill English reckons that landlords can’t raise rents”

  1. Draco T Bastard 1

    Blinglish’s concern is obviously for the landlords who are under pressure.

  2. AsleepWhileWalking 2

    Spoken like a man who has never experienced the prolonged torture of a ratcheting residential tenancy.

  3. AsleepWhileWalking 3

    I remember watching the rental market in Wainuiomata the last time the AS went up. Surprise, surprise… 3bdrm homes one week after the AS increased jumped the exact same amount a single parent with two children then qualified to receive.

    These were the ones for rent managed by Harcourts.

  4. Ric 4

    https://www.tenancy.govt.nz/rent-bond-and-bills/rent/increasing-rent/
    In practice increasing the rent too much means a landlord will have the property empty for longer and tenants will stay less time. It becomes couter productive.
    The answer is to build more houses and change the law so rent increases are allowed less often. The National government has failed miserably on both counts. Who were the idiots saying “there is no housing crisis” a while back.

  5. Cinny 5

    What’s stopping landlords raising rents… nothing.

    With the housing shortage is damn easy for a landlord to ask tenants for more money.

    When 50 people come to view our rental in Welly, it would be bloody easy to exploit them by asking for huge rent, especially knowing the government are happy to top it up with an accommodation allowance.

    What’s the outgoing government doing to stop landlords raising rents… nothing.

    I’d love to see a cap on rents as would many others, but it won’t happen under this government.

    • Adrian Thornton 5.1

      Unfortunately as far as I can see it isn’t going to happen under Labour either.

      • Keith 5.1.1

        Well you keep on voting National Adrian!

      • left_forward 5.1.2

        Certainly not while Labour is in opposition.
        But this article is not about what you inaccurately think might happen when Labour gets in, but about what has happened under National – any thoughts about their appalling attitude and behaviour on housing?

        • Siobhan 5.1.2.1

          Well, its appalling.
          National are appalling.
          People are suffering.
          So we can come here and talk about that in multiple articles all day, everyday, in a sort of National bashing echo chamber.
          But we’ve done that.
          Now maybe we should sit down and have an honest forthright discussion about why Labour are so static in the polls, making this election a very tight thing.
          We could say “oh, its the biased media’ and ‘young people don’t vote’, and ‘voter apathy”…but then look at the UK.
          If you have a Labour leader willing to step out of the mold of centrist policy, willing to step back and recognise what is really wrong in peoples lives and offer a real vision, guess what, you get votes.
          And he didn’t win, but he got a mandate, and the Tories are left looking alot weaker and more vulnerable than our National Party.

          • left_forward 5.1.2.1.1

            I entirely agree Siobhan – have you joined the Labour party?

            • red-blooded 5.1.2.1.1.1

              And adding to the comment from left_forward, I think I’d say that Corbyn won a mandate, but the mandate he won was within his own party. He won the right to continue to lead Labour. Little isn’t fighting for that – he has a team behind him; he’s not having to fight his own caucus colleagues. The mandate he’s looking for is to lead the next government. It’ll be a coalition no matter who wins, and the skills needed aren’t the same as the skills Corbyn’s been demonstrating in the UK.

              And yes, I’d like more people enthusiastic about Labour, and yes, I’d like them to go further in some of their policies, but actually a lot of their policies bloody good. I’m impressed with the recent announcements about employment relations, for example. The focus on collective bargaining and industry-wide bottom lines is quite bold.

              We’re less than 3 months out from an election – significant policy will have been thrashed out well before now. Anyone who wants to be part of that process has to join the party and get active within it while those policy discussions are happening. That’s the constructive approach. Sniping from the sidelines at the last minute isn’t going to achieve much. If anything, you risk alienating people, not only from Labour but from the kind of political participation that gives a party direction and ensures a strong mandate.

              • Corbyn is currently the preferred Prime Minister in the UK, so I think it’s a little cheeky to suggest that he didn’t have a mandate until he pulled off the most shocking UK Labour upset since 1945. If there is another snap election he is the PM, and to be honest, he’s already acting like one, to a far greater degree than May is.

                • In Vino

                  Yes, Corbyn won a mandate with the English public, much to the surprise of many in his own party. Little’s position is perhaps more the other way round. His own party is not reviling him as Corbyn suffered, but can he get public support with constant poor publicity from the media? Corbyn did brilliantly to overcome both obstacles in England. Here, we have to wait and see.

                  • Red

                    Corbyn lost the he election by the way and has no chance at the next, the number of seats between Torys and labour actually increased from the last general election

                    • McFlock

                      Because 98 is smaller than 55?

                    • left_forward

                      “…no chance at the next,..”
                      Doesn’t seem to be much evidence supporting your teacup reading.
                      What’s maths and evidence got to do with anything, eh Red?

                    • If that last UK election had been in a proportional system, Corbyn would already be Prime Minister, Red.

                      He didn’t lose so much as he and the rainbow coalition got cheated out of it by FPP, and he’s only got more popular since then.

                      Next election the Tories are goners.

                  • The people in the PLP that didn’t think he could do it don’t understand modern politics and the fact that there is a genuine move for a more earnest, consultative, and you know, representative style of politics right now. Anyone whose expertise in politics is based on more than simply being an overpaid pundit for neoliberal news or running as a centrist in a safe seat their entire life woke up to the fact that Corbyn was a real contender in this election and it was going to be close. And the surge for Corbyn benefitted even his enemies, and turned seats red that weren’t expected to trend that way for decades.

                    The only obstacle he had in his way was FPP.

                    And yes, I agree that Little has the opposite problem: The public aren’t sold on him but his caucus are. The closest Labour came to having its own Corbyn or Sanders was Cunliffe, but just like in the UK, the neoliberals in caucus couldn’t stand him. Unlike in the UK, he didn’t have the guts to hold on and go to the membership after the electorate rump sabotaged the Party Vote campaign. And Little has barely improved things since there because he’s not willing to depart from the status quo and wants things to be sensible and neat. That never won an election, but it’s still in the cards that National could lose it, or NZ First and/or the Greens could hand it to him.

    • indiana 5.2

      “happy to top it up with an accommodation allowance”

      Am I right to assume that you know which prospective applicants meet the criteria for the accommodation allowance – hence you can more easily target them as applicants that will be able to pay the rent you want?

      • Cinny 5.2.1

        No, I’m not into exploitation for financial gain, wasn’t how I was raised.

        But a greedy cunning person could, it would be fairly easy if someone stated their job, if there were kids and a partner.

        Then on to the net, find out their average pay and take it from there, accommodation allowance in relevance to rent.

        Taking in consideration the demographic that would want to live in said rental area etc etc. Wouldn’t be that hard if someone wanted to do it like that.

        Especially if there were plenty of tenants to choose from, you could even spin a yarn and say, oh when I was working out the rent I forgot to calculate in the rates, so the rent will actually be …$390 instead of $360.. and if they turned it down, move on to the next applicant on the list.

        Rental agencies appear to require an enormous amount of personal data from prospective tenants, crikey someone smart could make a little data base rigging up the whole thing by entering in a few numbers in the correct columns.

  6. Ric 6

    Why Adrian?
    The Labour party has some goood policy at
    http://www.labour.org.nz/housing
    Is ther some part of this policy that you think could be improved or needs changing ?
    The Labour party also aims to reduce immigration which will help take the pressure off housing.

  7. Gosman 7

    Any increase in income for people who rent has the potential for increasing the rental costs. Ideally you need to increase supply of houses to reduce that happening.

    • left_forward 7.1

      Economics 101 but entirely missing the point about Blinglish’s landlord welfare scheme – any thoughts about that?

    • weka 7.2

      “Any increase in income for people who rent has the potential for increasing the rental costs. Ideally you need to increase supply of houses to reduce that happening.”

      Funnily enough, Labour and the Greens both want to do that as well, and National doesn’t. Go figure.

    • Stuart Munro 7.3

      Nonsense – rent control is much more likely to control costs, and it’s pretty common worldwide.

      It takes the steam out of the speculative property market, reduces the pressure on tenants, and saves the government money.

      Building can help, but not at current building/migration levels.

  8. Ross 8

    Tenants can of course sleep in cars if they own one. I think that’s what Bill was referring to when talking about options available to tenants.

  9. web-developer 9

    Why don’t they order an inquiry into the profit margins of landlords like they did with the petrol companies? I think if we’re going to howl and moan about a few percentage points on the price of fuel, it would make sense to find out how much we are being gouged in rent.

  10. The Real Matthew 10

    In the last 3-4 months in my area of Auckland the rental market has experienced real change.

    Agents are having to decrease the rental asking price to entice tenants and I have a property sitting next to me which is currently vacant and has been for the past couple of weeks. Some families have gone through the property but alas it appears nobody has signed up just yet.

    Landlords can’t jack up rents in the current Auckland environment.

    • left_forward 10.1

      So that’s it – crisis is over! Thank god the Real Matthew is out there with his real finger on the real pulse.

    • AB 10.2

      Anecdote trading game – let’s play it!
      A mate of mine has put up the rents on 3 places by $50 each – did a bit of cosmetic tidy up between tenants. Proudly announced he had a got a permanent $150/week pay rise from 2 weeks work. (Muttered into my flat white about “unearned income”)

  11. Wensleydale 11

    Our rent pretty much goes up every six months like clockwork. The most recent increase, which takes effect in about 20 days, is an additional $45. We are feeling the squeeze.

    Much like Nick ‘Black Is White And Up Is Down’ Smith, Bill English is living in the land of make-believe. And probably just doesn’t give a toss.

  12. Heather Grimwood 12

    Not to do with rents per se but to profits of landlords:
    Only yesterday a middle-aged working ( out of the home as well ) woman told me how cold her house was, and when I asked whether she’d taken up insulation offer she said she and others in her block rented and were afraid of contracts not being renewed if they complained.
    I assure listers it has been flipping cold here in south in last few days.

    • Cinny 12.1

      Far out that’s not an uncommon story, and it sucks.

    • Carolyn_nth 12.2

      landlords have got til 2019 to insulate rental properties – too long, IMO.

      My estate agent (for their landlords) have recently had all their rental properties assessed for insulation.

      So maybe ask your landlord what are the doing to meet the up-coming requirements for insulation….?

      The bad news for me appears to be that my unit cannot be insulated – concrete floor and walls between me and surrounding units leave no space for insulation. Ditto for the flat slanting roof that covers my unit.

      However, I’m in Auckland, and it doesn’t get very cold for very long. I get the winter sun all afternoon. Without sun and at night, when it’s very cold, my unit doesn’t hold the artificial heat very well.

  13. Sorrwerdna 13

    Sounds like a lot of envy towards landlords here. Not all landlords are gouging the market -not all landlords increase the rent willy nilly -not all landlords are rich pricks. All landlords have expenses and risks they need to cover as does any business. There would only be a tiny percentage of landlords living of the rental income of their property(s) -most would have eye watering levels of debt . Landlords buy property not to piss you all off but to provide security and income in their future rather relying on the state.

    • Heather Grimwood 13.1

      To Sorrwerdna: I should have qualified my statement by writing ‘some landlords’.
      Believe me my sole motivation is the plight of this woman which I cannot get out my head.

      • Heather Grimwood 13.2.1

        To RG at 13.2: great emphasis, but lost on those who need to see your point….could make placard material.

    • AB 13.3

      “Sounds like a lot of envy towards landlords here”
      Ah – I think you are using the wrong word.
      ‘Envy’ is when you want something that someone else has.
      ‘Outrage’ is when something bad is happening that you don’t think should be happening at all.
      In other words, ‘envy’ is frustrated greed, ‘outrage’ is a moral stance. Quite different things. RW types like to mischaracterise outrage as ‘envy’ when slagging off lefties.

    • left_forward 13.4

      So why would anyone envy all these landlords steeped in debt and not making any money off it? Its really good of these generous souls to give back their old people’s dole too!

    • AB 13.5

      “Landlords buy property not to piss you all off but to provide security and income in their future rather relying on the state”
      Indeed – however because they skim money out of other people’s income streams those other people are more likely to be dependent on the state in the future.

      • Rae 13.5.1

        And of course, if any of those rental monies come to him via the tenant relying on the state then he too is relying on the state, not just in the future, but right now.

    • North 13.6

      Excellent response Left-Forward at 10.1 in answer to the Real Matthew’s ludicrous sound bite at 10, fashioned from his daily view of the empty house next door…… a view taken from his dunny window. Talk about stupid. Talk about post-truth. Especially the last line when probably in the marked majority of times there are multiple applicants for the one property. Still…..there may be a Real Matthew finger on the suggestion of a pulse……

  14. Kay 14

    I’m interested in learning more about just how big a role Property Managers are playing in the rental increase issue, and the problems in getting insulation done (too lazy/stingy).

    I’m a permanent renter and through pure luck am only now dealing with a PM for the first time ever, it’s been directly with landlords until 6 months ago. Previously I’ve had infrequent, minimal, even no rent rises, now I’ve been told to expect regular rises which doesn’t surprise me given everything I’ve been hearing about the rental market but still daunting because it’s literally pay up or be homeless.

    Given PMs are getting a % of the rent and they now seem to be running the show more than landlords are, surely it’s in their best interests to get themselves more income? if we were dealing directly with landlords, would rent increases be as frequent and as much? It feels to me like we’re paying the Property Manager’s salary on top of the rent.

    • Carolyn_nth 14.1

      Yep. Estate agents seem to have a policy of pushing landlords to regularly put up rent. My rent goes up by about 5% per year. This is not as much as the price-gouging landlords. It’s a clever price rise level because there’s not much to be gained by moving out in the current environment – will be faced with difficulty finding anything as good as what I’ve got for the same price.

      The upside for me with my current PMs, is that they do maintain the property very well.

      The estate agents do stay within the law, and are moving to comply with the impending legal insulation requirement. They have engaged one firm to do the insulation assessments on all their properties – probably cheap-ish as a major job lot.

    • weka 14.2

      that’s the way I’ve been hearing it too, that property manages are selling themselves hard and picking up more of the local rental stock (rather than owners managing it themselves) and then working to get the rents increased. Can’t say how badly I think of those people given the housing crisis.

    • Wensleydale 14.3

      No, you’re pretty much on the money, Kay.

      Property managers have a vested interest in increasing rents. It’s the nature of their business. Like you, prior to the property manager appearing on the scene, we had very sporadic and very conservative rent increases when we had them at all. Now that Slick Willie’s overseeing things, every six months we get a smug letter claiming “we’ve researched the market and believe the proposed increase is fair and equitable to all parties”, and the already gaping wound in my bank account gets a little wider.

      I said to him once, “You know my wages don’t go up every six months, right?” He gave me a humourless smile, shrugged and walked off. Lovely folk, property managers. Can’t get enough of them.

    • RedLogix 14.4

      As the resident bastard landlord I’ll second that too Kay. Since we’ve been in Aus our properties have been managed by PM’s and yes I have to say without our direct attention, what you are saying has been happening.

      But equally it has to be said they’re very professional and prompt with maintenance and insisting on working that needs doing. Also no bad tenants.

  15. Rae 15

    I wonder how much of this welfare for landlords is actually going to non resident foreigners owning investment property here. I wonder what other country will hand out welfare to foreigners just like that.

  16. Muttonbird 16

    “Tenants can have other choices.”

    They can live in cars, I suppose.

  17. The Chairman 17

    English seems to be in the same camp as those who think introducing a rental WoF in an overheated market won’t lead to rent increases.

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