Should we offer longer term tenancies?

Hi Jonathan

We had an interesting and lengthy discussion thread running in respect of the merits of short vs long term tenancies and the alternatives back in 2013, please see >>> http://www.property118.com/the-private-rented-sector-evolution-deed-of-assurance/40949/

It's a pity the politicians and tent lobbying groups didn't take more notice of the conclusions.
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"surely it is the tenants who do not want to be committed for this kind of time frame"

Well, my understanding of Labour's proposal is that only landlords would be committed for 3 years while tenants would still be able to give one month notice after the first 6 months.

IMHO, the main issue 'professional' landlords have with longer tenancies is the difficulty to evict should things go pear shaped.

If the whole court and eviction procedure was reformed so that eviction for rent arrears was guaranteed AND fast then I think landlords might start considering longer tenancy by themselves without political interference.

I am a tenant and would love nothing more than to know i can stay in the flat for the next 3-4yrs.
But my LL insists on 12 month tenancies
It makes me feel so uneasy, as 2 months before the tenancy is due to end i dread that S21 coming through the door.
Prior to this i was renting through an agent and they would ONLY issue 6 month tenancies renewing every 6 months at £75 a time... i understand they run a business but even so.
Personally i think landlords should offer longer term tenancies, but on the back of that i think the eviction process for rent arrears should be more streamlined and a quicker process, as i believe (correct me if im wrong) that it is the worry of a fixed term of 3 years, for example, stopping paying after 7 months and you have years trying to get them out
Our European cousins seem to have it working well with 5yr tenancies, but a better system to evict if needed.
I see many, many clients in my job who point blank refuse to private rent because “the landlord will serve notice after a year”, sadly in my area, this does seem to be the case, I have seen 28 S21 notices issued in the last 3 weeks… and all because LL is selling

Reply to the comment left by "Julie Ford" at "23/04/2015 - 09:31":

Hi Julie

Why don't you discuss Deed of Assurance with you landlord and agent?

Ifr you are anything other than a perfect tenant your landlord can still evict you in the normal way. However, if he evicts you through no fault of your own you can claim compensation. Have a think about how much this level of security would be worth to you and then look to negotiate on that basis. There has to be an incentive in it for the landlord too.

Just search Google for Deed of Assurance for more information. Most discussion refers back to Property118 anyway 🙂
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Jonathan,

Although I am now a landlord I can also comment as being a tenant for over 25 years - albeit not in the same property. I was employed in the oil industry, a sectior of employment which requires mobility. Having bought my first house in 1974 I was moved by my employer 6 months later to London. I had no problem being able to rent for 3 years but my employer required a break clause such that if I were moved out of London then the lease could be terminated. Equally the home owner required a break clause such that if he were returned to London by his employer then he too could break the agreement. In those days there were no automatic breaks by the letting agent 'to generate income.' That model exists in many places today but of course it is more in the upper professional market. I see no reason why it cannot work today across all sectors. Personally I think the current short term thinking derives entirely from letting agents wanting to generate turnover income rather than a need from the landlord or the tenant. It is all to do with risk. If the landlord is happy with the perceived risk regarding the tenant it is in his interest to keep the property occupied and generating income. It is in the tenants interest to have a 'long term home' rather than moving every 6-12 months. The second element to this is the risk perceived by the bank. My mortgages require me to issue leases of not more than 12 months. The lease therefore has a rollover into a 2 month notice in case either party fails to give notice. I now give notice on the 12 months but immediately offer a new lease, exactly the same as the previous one and I do it myself - just change the dates on the word document. But I want to maintain my time cycle and so does my tenant. Hence it works for both of us. I don't involve the agent so I have no real costs just an annual hassle factor.

It works for me. Why be driven by the letting agent?

Reply to the comment left by "Julie Ford" at "23/04/2015 - 09:31":

As a professional landlord I am in the business of letting long-term and am pleased to keep good tenants who pay the rent on time and look after the property. I could probably accept (though I don't know if my mortgage lenders would) longer guaranteed terms for tenants. However, as Julie and others have commented the quid pro quo is speedy eviction for non-payment of rent (and I would add for serious breaches of the tenancy such as unlawful sharing, damaging the property and anti-social behaviour). Unfortunately the trend is the other way with restrictions on so-called revenge evictions which are a recipe for specious complaints and self-inflicted damage to the property which is then fraudulently blamed on the landlord.

Many people especially those on the Left do not realise the unintended consequences of misguided policy. If tenants can play the system and get away with not paying rent and with damaging the property a minority, but a significant minority, will do so. They are commonly (but not exclusively) the less well-off tenants who are not worth suing. (A tenant who is an accountant, banker, doctor, engineer or solicitor will usually be worth pursuing so they are less likely to default.) What I fear will happen is that the PRS will turn its back on less well off tenants because it cannot take the risk. That leaves Councils and Housing Associations to house the remainder and will widen the divide between the haves and the have nots.

I wish the people at Shelter, the CAB and many in the Labour and Green parties would spend some time talking to landlords and would stop thinking we are all evil and rapacious (note to Shelter et al: there is little room for dialogue with us and understanding if you harbour such prejudices and if you consistently oppose landlords and take the side of the minority of tenants who are lying scoundrels you should be ashamed of yourselves.)

Reply to the comment left by "Mike W" at "23/04/2015 - 11:09":

Hi Mike

Why is it always the Letting Agent that gets the blame? People always forget that the Estate Agent doesn't make these sort of decisions. The Agent is an intermediary between the landlord and the tenant. The rental contract is based on whatever agreement is reached between those two parties, via the agent.

There are some landlords who insist on break clauses & some who like longer term contracts. The agent will communicate that to the potential tenant.

Let's not shoot the messenger!

Reply to the comment left by "ashley " at "23/04/2015 - 11:31":

Hi Ashley,
I agree that generally it is the Landlord or Tenant requesting short term agreements but I specifically signed in my agreement with a letting agent that I wanted 12 month tenancies granted with a 6 month break clause inserted and yet the agent still insists on doing a 6 month agreement with renewal every 6 months. (Note to self - must challenge agent on this!!!)

Reply to the comment left by "Alison Walker" at "23/04/2015 - 12:46":

Hi Alison

Why not offer a combination of a 6 month AST and a much longer Deed of Assurance. No need for renewals at all then which will save you and your tenant a lot of time, money and effort. Your agent might not like it too much because his income will drop, however, it's better to change your agent if that's the case and retain a good working relationship with your tenant 🙂

See >>> http://www.property118.com/deed-of-assurance-document-template-download/43126/
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I am more than happy to have my good tenants stay as long as they want to, but I want to be able to evict my bad tenants ASAP if I have to.

On a number of occasions Landlord Action have advised I issue both S8 & S21 notices when the tenant is at fault because a S8 can be contested. This would need to be addressed for longer tenancies to work.

It must be remembered that Landlords circumstances can change too and they still need the assurances they can regain possession of their own property as and when they need to, regardless of the reason. That's only fair.