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TODAY'S OTHER NEWS

Rows erupt over mandatory three-year tenancies and six-month break clauses

Arguments have already started over the government’s proposals to make three year tenancies the norm in the private rental sector.

Letting Agent Today reported over the weekend that the government will today, Monday, announce a formal consultation period on the proposal.

In government briefings to selected journalists over the weekend it was revealed that the three year period would be the most common duration for a tenancy in England with some exceptions, such as for students.

It has now also emerged that the government is likely to demand a six-month break clause.

Communities Secretary James Brokenshire will this morning issue a statement saying: "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."

However, there has already been dissent about the proposal.

Several comments on LAT’s story yesterday suggested that the issue of a tenant not paying rent may be exacerbated by the longer tenancies. One comment said “the government doesn’t have a clue” about how letting agents, landlords, buy to let investors and the broader rental sector operated.

Now Labour’s housing spokesman, John Healey, has also criticised the idea. He says: "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 says Labour’s plans include controls on rents, an end to what he describes as “no-fault evictions” and enhanced protection against sub-standard properties.

  • SCN Lettings

    It's all about votes folks. This is really what the idiots in Westminster are saying:

    "Look at us touchy-feely Tory Government looking after the interests of the poor oppressed tenants. Those nasty landlords and agents - we'll beat them up for you and get you a better deal. We can match the Corbyn offer and go even further. Vote for us!!"

    According to the Homelet Survey there are 2 million landlords and 4 million tenants.And tenants are on the increase. Do the maths. Landlords are less of a vote winner than tenants. Very soon our hands as agents ( on fees) and landlords ( on rents and tax increases) will be tied so tight you either go out of business, adapt and survive, or sell up and walk away. Less agents ( reduced competition) Less Landlords ( less rental stock) = higher rents. And the political feeding frenzy for votes starts again in a vicious spiral to the bottom where even the most efficient agent, and cost effective landlord cannot turn a profit. And then the PRS is no more. And who will house 4 million tenants.

    Be careful what you wish for Theresa...

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    It's about votes, and tax take. I have no doubt that Government will be successful in reaping CGT as landlords sell up, but I suspect there will be significant backfire in terms of votes.

    Any salesman will tell that it's easier to keep good customers than recruit new ones. So as tenants see rent hikes, less choice and potential homelessness through landlords quitting it is unlikely they'll be wooed to vote Conservative. On the other hand many of the staunch Tory backers (such as myself) have sworn to never vote for them again. Also when the general public wake up to the fact that it's costing near-on half a billion pounds in emergency accommodation, coming out of their council tax, they will realise what a complete and utter balls-up Government is making out of housing.

     
  • jeremy clarke

    Very soon the conservatives as we have known them will have completely disappeared replaced by red shirts playing The Red Flag at party conference with speakers from Russia, Venezuela and the labour party!

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    I trust the 3 year tenancies work both ways? If a tenant gets a job elsewhere and needs to move or has a baby and needs a bigger house or becomes ill and needs a bungalow THEY CAN’T! Thanks to the Tory Clowns!

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    I think that the proposed 6 month break clause would prevent them doing so Paul. However in reality the tenants will just move and stop paying the rent in most cases.

     
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    I doubt the 3 year tenancies will work both ways: the tenant will have all the benefits, so will continue to be able to give notice whenever she wishes - perhaps after the initial six months, though I suspect that element of the AST will disappear as well - whereas the landlord will have no options once the tenancy agreement has been signed: that's it for 3 years, unless the tenant decides to leave early.

    This proposal is going to play havoc with the short-term rental market, for example with expatriates who want to rent their house out while they are abroad for a year or two; or with people who move in with a new partner but want to hang on to their home and rent it out, in case the relationship doesn't work out; or with small builders or developers who buy a property with the intention of redeveloping it and its land, but rent it out for a year or two until they secure planning permission and the necessary resources. All these people, of which there are tens of thousands, are going to have to consider leaving their properties empty, as they will otherwise be trapped with a tenant for three years.

    Any small landlord with only a few properties is also going to be in serious trouble if they want to churn their assets: they will no longer be able to sell and buy with relative freedom, as their financial circumstances change - for example if they get married or need a larger house themselves for an expanding family, they won't be able to just "sell a rental house" to release capital.

    All of this is going to lead to a reduction in the supply of rental property, and increasing sclerosis in the circulation of tenants and stock.

    Landlords are going to have to be far, far more cautious about who let to, because you can bet there will be no improvement in their rights of eviction, or the speed of the courts, and a three-year tenancy sounds like positive encouragement for a rogue tenant to string out the process as long as possible.

    Will the 3-year rule apply to incorporated landlords, I wonder? Perhaps we will see a return to the old "company lets" that preceded the 1988 Housing Act.

     
  • Mark Hempshell

    One unforeseen consequence I can see with this is tenancies will have to have an automatic annual rent increase built in - unlike current situation where many landlords are willing to keep the rent unchanged to keep a good tenant. As with all these new measures tenants will end up footing the bill at the end of the day.

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    I think in most cases S24 has removed the stable rent regime that many landlords had as a policy.

     
  • Ellie Beale Belvoir Loughborough

    I feel a Housing Gridlock coming on...right now I’m glad I offer Property Letting AND SALES as the landlords I’ve spoken to are right at the end of their patience.
    Although it is true to say that the UK is becoming a nation of renters, and fast, much like the rest of Europe. If you can barely make a penny from renting out additional property that you have, and your hands are tied by the government on the decisions you can make, then it begs the question: What does it really mean to be a landlord in the UK today?
    The level of good decent landlords that I come across is far far greater than the little few I come across that need to change their ways.

    Landlords want to do the right thing and make an honest living like we all do, so why be punished for supplying a decent home for those that need it?

    Like the reader above said, it smells of votes, OR maybe the government are trying to saturate the sales market and drive sale prices down to reduce the amount of tenants and increase homeowners as we sale towards Brexit...

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    When will these clowns realise that landlords do not evict good tenants without reason.

    I have tenants who have been with me for over 6 years and I have no intention of evicting as they are good tenants. Sometimes though the landlords circumstances change and it is essential to keep the option of section 21 available. The government and others would do well to remember who actually owns these houses!

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    More policies campaigning for Generation Rent votes .. tenants will pay the price as usual when more properties get removed from the market by landlords who cannot commit to 3 years for very valid reasons.
    I hope tenants see through these policies soon and start campaigning themselves to cease landlords bashing !
    Who on earth decides these mad policies??!, unnecessary and unbelievable.

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    fully agree with john macay........but I am Labour voter, who has also sworn never to vote for them again.
    this government cannot build social housing in case it looses the cash given to it by the big development companies as a bung (sorry party donation) it cannot organise the legalities for renters or landlords with a system that makes sense to either, It ties local authorities hands when they want to develop social housing.
    Housing is one of the biggest difficulties the UK faces and we have vote hungry know nothings in charge.

    just what are they getting right.......? Biggest disappointment for me is Labour are just as useless.

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    Stupid silly and who ever proposed this wants sacking.
    Good landlords just want their rent paid and property looked after.
    It the "dodgy" agents who cause the problem as all they want is fees higher fees and more fees.
    Sort out the agents by regulating them with simple rules ie, min 6month last, then statatory periodic tenancy at no charge. If rent is late or not paid within 15 days of due date its an automatic vacate situation unless a guarantee is in place.
    Agents only charge a nominal £150 finders fee plus £30 to register deposit. No Check Out fee to the tenant.
    Inspections mandatory every 3 months.
    Sort out the agents not the landlord unless of course the landlord does not provide a fit and proper property.

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    As a landlord, how about tolerating a little bit of inconvenience both ways? To me the current balance is about right. A good landlord has to be able to move bad tenants out as quickly as possible. A good tenant needs security against bad landlords. If you give one side or the other absolute control of the tenancy then the whole "Deal" collapses and the letting industry will quickly wind up. There has to be a reliable cash flow for it to function. Like it or not the tenant has to pay their rent and if the law changes that then there can be no more letting.

    This is a point that I rarely hear any mention. A lot of let property comes with a leasehold management company subscription. This is paid as part of the rent so those lets will be a bit more expensive but it also means that a non rent paying tenant becomes a big problem as the landlord still has to bear the cost.

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    Guarantors are the answer and most landlords will see these as mandatory now, tenants without one will suffer

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