Longer Term Tenancy Proposals to Hit Landlords

The charity Shelter have put forward proposals for a new fixed-term, five-year tenancy agreements to be introduced for all tenancies in the private rented sector, with rent increases linked to inflation and tenants able to leave the contract at any point with two months’ notice for no apparent reason. This is a privilege that would not be extended to the landlord which would adversely affect the tenant/landlord relationship.

Whilst the Residential Landlords’ Association (RLA) believes that longer tenancies should be used where needed, it does not believe that such a model should be the default position.

Richard Jones, the RLA’s policy director, said, “Whilst Shelter continues to suggest that landlords are actively looking for opportunities to throw their tenants out altogether, the reality is that just nine per cent of tenancies are ended by a landlord, showing that the majority much prefer to keep tenants on than face an empty property”.  “Moreover, with the average length of private tenancies now reaching 20 months, it is clear that the current tenancy model already provides for longer term tenancies when they are needed for families”.

The RLA is now consulting on proposals that would achieve the right balance of rights between the landlord and tenant while maintaining the confidence of mortgage lenders.  Shelter’s proposals would not work, not least given that many tenants, especially younger people, such as students or those who are eventually looking to buy a home of their own, seek a short term tenancy.

Shelter’s calls for contracts with index linked rent rises would be bad news for families who are presently seeing average market rents (outside of London) increase by less than inflation.
It maybe that the best way to prevent rents becoming unaffordable is to support the smaller scale landlords to invest and bring much-needed new property to the private rented sector.  The plan for longer term tenancies could result in landlords being no longer willing to invest.

ARE YOU USING THE CORRECT TYPE OF TENANCY AGREEMENT?  If the worst happens and you end up in court with your tenant it is essential that your documentation is in order.  Please contact us for a free, no obligation review of your tenancy.