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Advantages to long tenancies, rent caps - agentThere are advantages all round in the certainty that three-year tenancies and even rent controls can offer, according to the head of Carter Jonas letting agency Lisa Simon.

Few tenancies last just the six months that politicians seem to think. The lifespan of three years suggested by Labour, after an initial six month trial period, will often be foreshortened by the tenant's desire to move she says.

In any case, Simon says there are advantages to the longer tenure not being advocated by Labour. The tenant has a degree of security while the landlord has a better knowledge of the likely consumer price inflation-linked income and potentially less worry about non-earning voids between tenancies she says.

For central London landlords, she says, the impact would be minimal as the corporate market for years has routinely demanded pre-agreed extension periods and rent negotiated in advance, usually in line with RPI.

Some more-outdated mortgage lenders will need to amend offers which currently restrict buy to let landlords to providing tenancy agreements for a maximum of 12 months. They should regard this period of certainty as an advantage that allows investors some assurance over their ability to repay the mortgage through property earnings she says.

However, Simon says safeguards to remove bad tenants must be appropriately robust to accommodate longer tenancies. Model' tenants who turn into the tenant from hell in the seventh month must not have more protection from repossession, she warns.

Lettings agents may have to rebalance their budgets to exclude tenant fees. It is important to prepare, although this may mean raising letting and management fees charged to landlords who will pass them on through higher rents she says.

Simon believes letting agents will have a certainty that their fee income will grow in line with consumer price inflation as rents grow.

But politicians also have to realise that imposing the duties of government on to landlords and lettings agents, such as immigration checks .... have to be paid for. If the government of whatever hue does not want to fund this work, and it probably will not, then it has to accept that a fee is charged to the landlord if the agent does the work she concludes.

Comments

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    I agree Simon...I think it will also impact the tenant management and, although on the face of it, it seems to be to provide the tenant with security, what about the incentive to Landlords to keep their tenants. I recently read an article about how the smallest recognition of tenants can encourage long tenancies renewed at each AST end. If the tenant is contracted to 3 years, not only is the Landlord very exposed, but so is the tenant! The incentive I use to manage my Landlords to ensure they keep high standards is along the lines of "a replacement instead of shoddy repair will be seen as very welcome by the tenant!". This will go out the window. If the overall aim is to make Landlords of a higher standard and combat the "rogue" landlords, then I would say guaranteeing a tenant for 3 years is not the way to achieve this.

    • 28 April 2015 09:18 AM
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    The thing about political change, especially applied to Lettings is the law of unintended consequences, often referred to as 'Murphies Law' there is no point trying to see 'the bright side' of a proposed piece of legislation without considering the downside as well. Traditionally once a tenant has additional rights, these rights will be exploited and there will not be any practical counter balance in terms of Lanlords rights. If three year agreements are made mandatory the courts will be very reluctant to evict within this term, bad tenants will be very hard to remove and the financial consequences to the landlord will cause many to exit the market which is exactly the opposite of what you want to sole a housing crisis. If labour get elected they will ruin the economy and Estate Agents and Lettings agents will be used as cannon fodder in their long term war against anyone who aspires to liftt themselves above mediocrity. All these mistakes have been made before, we don't need to guess what will happen, we just need to look back.

    • 28 April 2015 05:32 AM
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