Government look to throw landlords under the bus with 3 year tenancies

by Property 118

9:15 AM, 2nd July 2018
About 5 months ago

Government look to throw landlords under the bus with 3 year tenancies

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Government look to throw landlords under the bus with 3 year tenancies

The government has released to the BBC and other selected journalists that it intends to hold a consultation considering making the shortest term tenancy in England 3 years with a 6 month break clause for tenants.

The consultation is due to start this week and run until 26th August.

Communities Secretary, James Brokenshire, said to the BBC: “It is deeply unfair when renters are forced to uproot their lives or find new schools for their children at short notice due to the terms of their rental contract.

“Being able to call your rental property your home is vital to putting down roots and building stronger communities.”

He then told the Mail that under the proposed reforms, tenants would be able to leave before the end of the minimum term, but would have greater protection if they wanted to stay for an extended period.

By the Governments very own figures the average tenancy length is over 4 years so why take away nearly all flexibility? Only normally the worse tenants are served a section 21 by landlords. Do politicians still want the Private sector to house the tenants that the state can’t accommodate?

John Healey, Shadow Housing Secretary said: “Any fresh help for renters is welcome but this latest promise is meaningless if landlords can still force tenants out by hiking up the rent.”

Healey also added that Labour plans for the PRS included controls on rents, an end to no fault evictions (ie. section 21) and even more protection against substandard properties.

As easily predicted Shelter waded in with Polly Neate saying: “This is an important step forward. Losing a tenancy is the main driver of homelessness and also causes huge instability for renting families so everyone who rents will be very pleased to see a move towards longer tenancies, but if the government really wants to stand up and provide stability for renters, they can and should go beyond three years to provide real protection from eviction, and the huge upheaval of having to move home, jobs and schools.

“The government needs to bring forward new legislation quickly with tens of thousands of families already homeless and many more at risk of the same fate, we simply cannot wait.”



Comments

terry sullivan

9:48 AM, 2nd July 2018
About 5 months ago

unfair contract terms?

Whiteskifreak Surrey

9:53 AM, 2nd July 2018
About 5 months ago

I am not sure if that will be forced. What about the students? They do not want 3 year tenancy, they want one year.

Simon Williams

9:56 AM, 2nd July 2018
About 5 months ago

My message to my MP:

Any move to make 3 year minimum tenancies mandatory risks harming the very people it's designed to benefit. Landlords will become ever more choosy about who they take on. People without checkable track records and steady jobs will suffer because landlords will no longer take the risk. Families are likely to see less property being made available to them in high demand areas as landlords may well prefer to rent houses to sharers, who tend to stay for shorter periods. These risks were highlighted by the LSE report in 2016.

Average tenancies are already 4 years long. The vast majority of tenants who pay rent on time and look after the property stay as long as they like, as evidenced by the fact that over 90 percent of tenancies are ended by tenants not landlords. But what the current section 21 system does provide is a crucial get-out when things go bad, allowing landlords to be a little less strict on their rental criteria.

Tenants don't need more gimmick laws. They do need more choice - more rented property and more landlords competing for their precious custom. Instead, politicians fall over themselves to enact endless measures that just deter landlord investment and reduce supply. The very worst thing we could be doing.

It is true that European rentals tend to be longer term, but predicting and indeed evicting bad tenants is generally easier and the balance between supply and demand is more equitable than the UK, often backed up by landlord tax incentives that we British landlords could only dream about. Indeed, nearly all major European countries allow full deduction of mortgage interest against tax, most have generous depreciation allowances and most have more generous capital tax rules, e.g. Germany, where sales at the 10 year plus point attract nil CGT.

The government will pick the pro-tenant cherries from other countries' systems, but not the pro-landlord bits it doesn't like. The result: undersupply; rising rents; lack of choice.

Marsland2000

10:02 AM, 2nd July 2018
About 5 months ago

This confirms my view that Buy-to-Let is becoming too one sided in the tenants favour and therefore is too risky for small landlords. We are slowly moving back to the pre-1995 situation where it was virtually impossible to evict tenants for whatever reason, and therefore the private rented sector nearly ceased to exist. When combined with the drip drip of petty regulation (GDPR, Legionella, Right to Rent, constant issuing of Rent Guides etc), BTL is just too big a risk. All I can say to politicians, Shelter, Generation Rent et al is "be careful what you wish for" because the unintended consequence of your policies will be a dramatic contraction of the private rented sector. If there is a hint that S21 will be abolished we will be pulling out of the market and selling up.

Luke P

10:11 AM, 2nd July 2018
About 5 months ago

There might be more support from LLs if the tenant was equally tied to the three-year minimum.

AnthonyP

10:19 AM, 2nd July 2018
About 5 months ago

I always get very frustrated on everyone telling me what I should do with my property. If I want to rent for 1 month, 1 year or 10 years, allow pets, etc. it should be my decision and if acceptable to the tenant they will sign or else go somewhere else. Why is it my responsibility to provide stability to tenants and not the government with council housing?

Enough of my complaining, this is my first posting and just wanted to get it off my chest.

With regards the article. Just a couple of points, my mortgage company will only allow a 1 year contract to be signed. So I assume the Government will need to address this issue first. I personally am more than happy to have a 3 year contract as long as I am also protected. I notice that it states that Tenants should have a 6 month break clause does the Landlord get one as well? Or does this come under a no fault eviction. Can I factor in inflation increases each year if not then I may be forced to increase the yearly rent increases from day 1.
Just a couple of thoughts

Neil Patterson

10:25 AM, 2nd July 2018
About 5 months ago

Students lets is one area they have already identified as an exception.

I have no idea how they will get round lenders though with max 12 month AST criteria.

Whiteskifreak Surrey

10:35 AM, 2nd July 2018
About 5 months ago

Reply to the comment left by Neil Patterson at 02/07/2018 - 10:25
Thank you Neil, appreciated.
I guess the lenders will have to adjust, especially considering the drop in BTL lending. It is of course a worry.

terry sullivan

10:36 AM, 2nd July 2018
About 5 months ago

i have no mortgages--but 3 years has to be bilateral and non-payment must have powerful and rapid remedies. if 3 years and tenant stops paying--can i evict only after 3 years/ S8 OR SIMILAR TAKING AGES?

terry sullivan

10:41 AM, 2nd July 2018
About 5 months ago

company lets?

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