Allowing sub-letting could create havoc in the Private Rented Sector, say insurance expertsMake Text Bigger
Property118’s Landlord Insurance experts have expressed concerns over the Government’s plans to allow private tenants to sub-let properties.
Included in last week’s Budget small print, under the title “Support for the sharing economy”, was a clause seemingly giving the green light to sub-letting. See what readers think here.
The wording said that the government intended to “make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis.”
In simpler terms, landlords will no longer be able to include clauses in tenancy agreements forbidding tenants from sub-letting part of the property out to others.
“The Government is effectively opening a can of worms and paving the way for havoc in the private rented sector,” says a spokesperson for Property 118’s Landlord Insurance provider Discount Insurance.
“There are many questions left unanswered over this, such as what will happen if the tenant sub-letting the property leaves, but the tenant they are subletting to remains?”
There are also concerns over how landlords are expected to carry out checks on the immigration status of their tenants, if they can no longer retain full control on who is living in their rental properties.
Some landlords are experiencing problems with tenants taking out tenancy agreements and then not moving into the property themselves, but instead putting up partitions and sub-letting to as many people as possible. This problem could potentially escalate now that the government has effectively given this process a thumbs up, say industry experts.
“We hope that the government will reconsider this ruling, in the meantime, we recommend landlords protect themselves and their investment not only with landlord household insurance, but also with Rent Guarantee Insurance, this will ensure that they will have always have money to pay the bills in what could be an uncertain period.”
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