Renters Reform Bill – the end of fixed term tenancies

Renters Reform Bill – the end of fixed term tenancies

9:01 AM, 23rd May 2023, About 11 months ago 33

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By abolishing fixed term tenancies, the Renters’ Reform Bill will cause serious problems for landlords of student accommodation. The issue is not that the tenants may stay after the end of the tenancy but that they might leave early.

Even now it can take months to evict over-stayers. Many properties are unlikely to let to students except at the start of the academic year.

Students who have previously signed a tenancy from, say, September 1st to July 31st will be able to leave at any time on one month’s notice.

Many will choose to avoid paying rent over the summer holidays.

The group may choose to give notice

If one or more of a group of students falls out with the others, the group may choose to give notice rather than resolve their differences or bring in a replacement tenant.

Landlords will lose income and become liable for Council Tax.

The quid pro quo is that rents will have to rise to give the same annual return and cater for the risk of voids.

Some landlords may stop letting to students altogether putting extra pressure on rents.

There are other adverse effects to tenants being able to leave early.

May not offer better terms for signing a longer lease

Landlords may not offer better terms for signing a longer lease as tenants cannot bind themselves to stay.

Attempts to do so by reducing the rent later in the tenancy may fall foul of the Tenant Fees Act.

Instead of staying in hotels or Air BnB, holidaymakers may pretend they want a home and sign a tenancy of a property in a tourist area.

As soon as the ink is dry on the contract, they can give a month’s notice. “And summer’s lease hath all too short a date” – W. Shakespeare.

Renegotiate letting agents’ fees

Landlords will have to renegotiate letting agents’ fees. The typical 10% plus VAT of the first year’s rent will be excessive if the tenant leaves after a few months.

Michael Gove says the Bill is intended to help tenants to stay long-term in their homes.

This part of the Bill has nothing to do with that and allows, indeed encourages, tenants to behave cavalierly.


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Comments

AnthonyJames

0:01 AM, 24th May 2023, About 11 months ago

Groups of students will just have to abandon the idea of booking the whole of a shared house in February for the following September. They will just have to take their chances that a previous tenant may decide to stay, and hold a lottery for whomever in their group therefore doesn't get a room. Houseshares always have a degree of instability.

AnthonyJames

0:04 AM, 24th May 2023, About 11 months ago

I am more concerned about the loss of Section 21 than the moans of a few featherbedded students, who unbelievably still don't have to pay council tax. Almost every other CTax exemption has been lost, so why do students still get this perk?

Paul Essex

11:46 AM, 24th May 2023, About 11 months ago

Reply to the comment left by Ian Narbeth at 23/05/2023 - 17:43
I fully agree with the premise that this was potentially already a problem.

But in reality the risk was negligible as students always required a guarantor, usually a parent who was unwilling to risk being responsible for court fees etc.

Landlord Power

14:00 PM, 25th May 2023, About 11 months ago

I agree this going to cause serious problems for small landlords who will have vacant periods and will not be able to generate enough income to pay the mortgage and outgoings. Can't the various Landlord Organisations organise a judicial review as to why PBSL are exempt whilst other landlords providing the same services to students are not??

Ian Narbeth

14:33 PM, 25th May 2023, About 11 months ago

Reply to the comment left by Hardial Lakhpuri at 25/05/2023 - 14:00
HI Hardial
You cannot get a judicial review of the Government's decision to do this. When the Bill becomes an Act it will be law. The fact that private landlords are treated differently from social housing landlords or providers of student accommodation is not amenable to judicial oversight.

Julie

15:49 PM, 25th May 2023, About 11 months ago

I let my property unfurnished, so I don’t think people will want to go to all the trouble of removals etc. after just a few months .

Reluctant Landlord

16:40 PM, 25th May 2023, About 11 months ago

Reply to the comment left by Julie at 25/05/2023 - 15:49
I agree and to be honest with a housing crisis ever deepening, any tenant should be grateful to be offered a contract after all the rigerous checks every landlord will be doing!

The good tenants are going to want to stay - the biggest hurdle is for a LL to sniff them out first.

JB

9:00 AM, 26th May 2023, About 11 months ago

Would it be possible for a group of tenants to make an agreement between themselves regarding how long they stayed in the house? After all its disruptive for them if one of the group gives notice to leave half way through the year

Reluctant Landlord

9:14 AM, 26th May 2023, About 11 months ago

Reply to the comment left by JB at 26/05/2023 - 09:00
yes but at the end of the day you still have no control over this and neither do they!

Chris Rattew

19:57 PM, 26th May 2023, About 11 months ago

The abolition of fixed term tenancies fails on a number of points. Our tenants are students, university staff and recent graduates. They need to arrange accommodation months before coming, which the bill does not allow. They also need to be secure for the fixed term. The new bill has around a dozen grounds for termination on 2 months' notice, so we will still have to offer a fixed term to guarantee security for the tenants till their study or contract ends. Those leaving around 1 September can leave on a couple of weeks' notice, but many give notice by May ready for the next intake to make contracts. I cannot see why a fixed term cannot be a legal contract, and we would not in any case be able to permit many of the early termination grounds in the new bill.

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