Periodic contracts – financial nightmare for landlords?
With the new Renters Reform Bill are you concerned about the move to periodic contracts?
We bought our flat in 2007, just before the crash. It is still in negative equity and will remain so for the foreseeable future. We bought a buy to let with the aim of topping up our pension. It has been and continues to be a financial drain and we are in a negative situation every month due to the high interest rates.
We are now retired, and due to the slow market, we have been unable to sell our flat. Periodic contracts are a huge worry for us and will cause us extra burden financially. As we all know the cost of finding new tenants and drawing up contracts is expensive.
A 12-month fixed-term contract in the first year gives us peace of mind. The move to periodic is so restrictive and could incur extra expense.
We have always been very caring landlords and the happiness of our tenants is a priority. I always reply and sort out any problems immediately. My husband now has dementia, and we need to sell but can’t. The RRB is so restrictive, stating we can’t sell in the first year.
All we want is for fixed term contracts to be allowed in the first year of tenancy and then change to AST as we have always had.
How can we make our voices heard? Do other landlords agree?
What other investment is there where so many restrictions are placed on an asset that you own?
Landlords are constantly vilified but it is proven that so many landlords are like us. It’s a nightmare
Periodic contracts are a huge worry to us.
Karen
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Member Since December 2023 - Comments: 1590
9:54 AM, 16th January 2025, About 1 year ago
There will be a risk that tenants will leave early. I assess the risk as having a low likelihood and a low impact.
Member Since September 2021 - Comments: 17
11:10 AM, 16th January 2025, About 1 year ago
Agree with Cider Drinker. I think problem will be properties that only available for 6 / 12 months due to folk working away and similar situations – how do they get back when return ?
Member Since June 2019 - Comments: 782
11:25 AM, 16th January 2025, About 1 year ago
The short stay risk will probably only bite landlords with properties in holiday hot spots. I can unfortunately see this as the latest guru sales pitch, rent for the summer season re-let at a profit and walk away in the autumn.
Member Since July 2013 - Comments: 2002 - Articles: 21
1:28 PM, 16th January 2025, About 1 year ago
On the one hand, Government complains that tenants were having to move too frequently. On the other, they will all have rolling break clauses on two months’ notice.
Tenants will not be able to commit to stay longer. So, no discount for agreeing to a 2 or 3 year contract. Instead, rents will probably rise to reflect that the tenant has a very flexible deal and the landlord has little security of income and may be paying more fees to his letting agents.
Member Since September 2018 - Comments: 3538 - Articles: 5
2:57 PM, 16th January 2025, About 1 year ago
the way its going I can’t see any genuine tenant that has managed to secure a property before the RRB comes in, actually being in a position to move again voluntarily because there is very little going to be out there TO be available to let to them.
Any LL being approached by a T that has been in a property less than 6 months after the RRB comes in is going to ask why they are applying to them for alternative accommodation.
The question over the regular short term use/ higher than average rental move in/move out frequency of any tenants applying for a new place, is going to potentially be another LL red flag consideration for the LL they have approached surely? It would make me suspicious without further investigation for sure
Member Since February 2022 - Comments: 206
5:14 PM, 16th January 2025, About 1 year ago
This is always a risk when investing, you need to plan an exit strategy and adapt as situations change. It might be easier to sell sooner rather than later and take a financial hit; it might get worse it might get better. You might not be able to evict your tenants when you want to later. They are good tenants now but that can change at any point.
In the meantime you can join most of us in the hatred of the upcoming RRB but let’s face it coming and you might was to get out will you still have a S21 available to you.
Good luck
Member Since May 2023 - Comments: 6
10:53 AM, 17th January 2025, About 1 year ago
It’s going to be exactly like when applying for jobs. If you can’t show that you can’t stick around, you ain’t getting the place. Just need to add an additional verification criteria to your check-list.
Member Since April 2015 - Comments: 468
11:00 AM, 17th January 2025, About 1 year ago
A tenant can move in, sign the tenancy agreement and immediately give a two month notice to leave. How disastrous is that?
Member Since June 2015 - Comments: 333
11:13 AM, 17th January 2025, About 1 year ago
I don’t understand why the government wants to allow such short term tenancies. Two months minimum is ridiculous. There has been a huge backlash against Airbnb style letting so why insist on all of us potentially becoming short term lets?
Obviously some of us will be more impacted than others due to the location and style of our properties but this degree of uncertainty is going to be bad for neighbours and housemates.
Member Since October 2019 - Comments: 401
11:25 AM, 17th January 2025, About 1 year ago
Tenants must always give notice too! What a load of tosh! I’ve only ever had 1 tenant give notice – when they want to go, the simply go! If a LL does anything wrong, it’s the gallows!