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

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

9:15 AM, 2nd July 2018, About 5 years ago 97

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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.”

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Hemant Shah

8:20 AM, 7th July 2018, About 5 years ago

So if Bank of England interest rate goes up Landlord goes out of pocket because you can’t increase rent

Darren Peters

9:44 AM, 7th July 2018, About 5 years ago

Only times I've ever issued a Section 21 in 23 years are:
1) to sell properties as a consequence of S24
2) to remove tenants who are causing other tenants grief.
3) In anticipation of 3 year tenancies, to remove some tenants just on the brink of anti-social (to fellow tenants) whom I've decided I don't want to be stuck with for 3 years at a time.

In other words, the 3 year tenancy thing has prompted me to pre-emptively evict to increase the quality of the people I will be housing while I still have that option

You might like to examine your own portfolio and consider whether you are happy with all of your existing tenants while there is still time.

10:06 AM, 7th July 2018, About 5 years ago

My lease prohibits contracts over 12 months. What happens then?

Ian Cognito

11:53 AM, 7th July 2018, About 5 years ago

Maybe my outlook is different from that of (most) other 118 contributors.

I resolutely agree with the principle that a tenant should be able to consider a rental property his home. As such, he should not be living with the nagging doubt that he may be forced to leave in 12 months, or less, through no fault of his own; maybe due to a demand for an unreasonable rent increase, or because the landlord has decided to sell-up and invest elsewhere.

I also firmly believe in the principle that it should be simple/quick/inexpensive for a landlord to evict a ‘problem tenant’.

An apolitical and considered change in legislation is needed that provides for both tenant and landlord.

terry sullivan

12:03 PM, 7th July 2018, About 5 years ago

then i require a higher rental and llarger deposit and annual rises in rent

i am a bit rusty but what is minimum lease that constitutes an assured tenacy

Ian Cognito

13:57 PM, 7th July 2018, About 5 years ago

Reply to the comment left by terry sullivan at 07/07/2018 - 12:03
Explain the need for a higher rental and larger deposit.

Yes, there needs to be a mechanism for applying an increase over the duration of a longterm agreement (by which I mean 3 years or more). RPI or CPI are the obvious contenders.

6 months is the minimum term for an AST.

Old Mrs Landlord

14:22 PM, 7th July 2018, About 5 years ago

Reply to the comment left by Ian Cognito at 07/07/2018 - 13:57
Whilst it is true that the 1988 Act introducing the AST made six months the minimum term, this was modified by the 1996 Housing Act which inserted a new Section 19A into the 1988 Act, abolishing the minimum term. The myth of the six month minimum term is perpetuated in the recent MoHC&LG consultation paper "Understanding barriers to longer tenancies" (p.9) where they set out the current legisative framework. We are the victims of new laws dreamt up by wet behind the ears policy makers who have no understanding of the current legislation or conditions of the rental market yet are constantly tinkering with something that wasn't broken. O'Brien's Onward paper illustrates this perfectly. Out of six properties we have tenants who have been with us for ten years and nine years respectively and in twelve years of letting have had only two tenants who have not left at a time of their choosing.

Kate Mellor

18:33 PM, 7th July 2018, About 5 years ago

Reply to the comment left by Simon Williams at 02/07/2018 - 09:56
Couldn’t have said it better myself!! If only it were manditory for politicians to have an economics degree we might see more common sense. Or better still if their motivation was the long term betterment of our nation...

Kate Mellor

18:49 PM, 7th July 2018, About 5 years ago

Reply to the comment left by Old Mrs Landlord at 07/07/2018 - 14:22
I’m not sure I follow you...there isn’t a minimum term as you say, if both tenant and landlord agree to something shorter than 6 months, but a tenant does have “statutory protection” for the first six months of any tenancy, so an initial tenancy of shorter than six months is not enforceable by the landlord should the tenant not wish to leave at the agreed time, because they are protected for a minimum of six months. Hence the usual fixed term being six months long.

Aside from that, I agree entirely. I started out offering longer tenancies and not one tenant wanted it! They did not want to be fixed in. We are in the business of letting out our properties and it makes poor business sense to have an empty property. If a tenant pays their rent and doesn’t cause a major nuisance then why would you evict them? In fact it makes better commercial sense to accept a slightly below-market rent to keep a good tenant long term than it does to keep hiking up the rent and having regular voids.

This is purely a publicity stunt to be SEEN to be doing something. This is all smoke and mirrors and it won’t happen in my opinion. There are too many obstacles. First they’ve got to tackle mortgage lenders. They can’t make 3 year tenancies mandatory if most lenders bar anything over 1 year.

Old Mrs Landlord

23:17 PM, 7th July 2018, About 5 years ago

Reply to the comment left by Kate Mellor at 07/07/2018 - 18:49Agree with you Kate, it's all about perception and vote catching. They must be seen to be taking action on behalf of the poor downtrodden, exploited tenants. On the subject of minimum tenancy terms, it's true that now that a S.21 cannot be served less than four months into a tenancy the six months minimum has in practice become the default minimum, but there is no barrier to landlord and tenant mutually agreeing a shorter term and the statement of current legislative framework as set out in the Government consultation paper is factually incorrect.

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