So-called ‘Conservatives’

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Dr Rosalind Beck has had an article published today on conservativehome which we are pleased to see sets the record straight on some of the recent proposals for the PRS emanating from so-called ‘Conservatives.’

Please Click Here to read the full article.

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Government plans for compulsory 3-year tenancies

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3-year tenancies:

The Government is launching a consultation on its controversial proposal to make residential tenancies in England subject to a three-year minimum term, with a six-month break clause.

Launched earlier this week, the consultation will seek “…views on longer minimum tenancies, which are used in other countries, as well as ideas on how to implement the model agreement.�

The Government’s free model tenancy agreement introduced in 2014 and updated February 2016 is designed for landlords and tenants entering into an assured shorthold tenancy (AST) of short, or voluntarily of extended lengths, and contains guidance on its use and clauses.

The Government says the model agreement is “…particularly relevant for use when the parties are entering into a longer term tenancy of 2 or more years. It, therefore, contains provisions relating to rent reviews and those which enable the landlord or the tenant to end the tenancy during the fixed term if their circumstances change.�

Progressive change or election reality?

The new Housing Secretary James Brokenshire has said:

“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.�

Shadow housing secretary John Healey has said:

“This latest promise is meaningless if landlords can still force tenants out by hiking up the rent.�

He said Labour plans included controls on rents, an end to so-called no-fault evictions and protection against sub-standard properties.

The wording within the consultation document proposes that tenants will have to be offered a minimum three-year tenancy agreement, but tenants would be able to leave before the 3-year term is up. In other words landlords would be locked-in, but tenant would not be.

The consultation will look into the practical workings of such a change and what exemptions may be necessary to make it work best, for example, those tenants that are happy with a short, say six or 12 month let, students being a prime example.

Landlords against the move

However, the consultation on mandatory three-year tenancies has come up against objections from several quarters in the industry, with the National Landlords Association (NLA), representing thousands of its private landlord members, questioning its validity.

There is also a big question mark over mortgage lenders rules which usually specify short-term tenancies of 6 or 12 months only. It could entail many lenders having to change their rules.

Richard Lambert CEO of the National Landlords Association has said that it introduces a shift in the Government’s stance on this issue, from one of volunteering to offer longer tenancies, to a compulsory regime:

“In his speech to the Conservative Party conference last October, Sajid Javid [then minister responsible for housing] announced plans for a consultation on how to encourage longer tenancies. That’s been the tone of the discussion ever since – consultation and encouragement.

“Frankly, right now, I feel we’ve been misled, says Mr Lambert.

“This is supposed to be about meeting the needs of the consumer. NLA research with tenants finds consistently that around 40% of tenants want longer tenancies, but 40% do not. More than 50% consistently say that they are happy with the tenancy length they were offered, and 20% tell us that when they asked for a longer tenancy, they got it.

“We would accept that the flexibility of the current Assured Shorthold Tenancy isn’t used as effectively as it could be, and that we should be looking to find ways to ensure that tenants are offered the kind of tenancies they need at the time they need them.

“That means thinking about how to modernise a model devised 30 years ago, to take account of the changes in the people who are renting and the way they live their lives. How will that be achieved by moving to a more rigid system, more reminiscent of the regulated model the current system replaced?

“It’s like urging someone to update their 1980s brick-style mobile phone, but instead of giving them a smartphone, offering them a Bakelite dial phone plugged into the wall.

“This is a policy which the Conservatives derided when it was put forward by their opponents in the past two General Election campaigns.

“It’s hard not to see this as more of a political move aimed at the renter vote than a genuine effort to improve how the rented market works for all those involved,� Mr Lambert concluded.

Short Duration Consultation

As part of the consultation, which runs until 26 August 2018, ministers are seeking views from landlords, tenants and related organisations about the most effective ways to tackle obstacles to introducing longer tenancies.

If government proceeds with mandatory longer tenancies, primary legislation will follow. Following the results of the consultation, the government says it will consider next steps with legal professionals.

The title of this very short duration consultation, “Overcoming the barriers to longer tenancies in the private rented sector�, perhaps gives a clue to the fact that this could be something of a fait accompli exercise?

Landlords should make sure their views are heard in this important development.

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – Government plans for compulsory 3-year tenancies | LandlordZONE.

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BLOG: Universal Credit: Complaints – and sticking to your guns

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RLA trainer and Universal Credit expert Bill Irvine shares one of his latest cases – which saw a Universal Credit payment made to a claimant’s friend by mistake. He talks about the issues in getting the complaint taken seriously – and the ultimately successful outcome. In a few of my earlier bulletins, I refer to […]

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Wales fee ban will lead to increased costs

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Banning fees in Wales will drive up costs and change the way landlords interact with letting agents, RLA Director for Wales Douglas Haig told the Senedd today. Giving evidence on the on the Renting Homes (Fees etc.) (Wales) Bill to the Equality, Local Government and Communities Committee in Cardiff, Mr Haig said that the proposed changes will […]

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The GoCompare website to finds best areas for buy to let

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Buy-to-Let locator:

Manchester ranks the highest city in the new GoCompare comparison tool’s city ranking hierarchy, with the city coming out as the best place to rent out a house. The tool gives an average rental yield of 5.55%.

The finding come from an interactive tool launched by GoCompare, that allows users to compare two different cities showing the best option for buy-to-let.

The tool compares cities across data points, including average property price and rental yields, population under 35, number of properties available, number of letting or maintenance agencies, number of new housing developments, properties currently available for rent and rental price growth.

Analysis by towns, the tool makes Stoke-on-Trent the least expensive area to buy property with an average property price of £106,000.

At the other end of the scale, Oxford comes out one of the most expensive cities to buy a rental property with an average price of £411,000.

But at the top of the scale, as expected, London has highest prices, averaging £484,000, therefore giving the lowest yield of all the cities.

In terms of rental price growth, Manchester again takes the first position, with growth of 5.76%, Leicester in second place at 5.30%, and Cardiff in the third position with an average growth of 5%.

The GoCompare tool puts Manchester in top position for rental yield at 5.55%, Sunderland in second place at 5.37%, and Liverpool in third place with an average yield of 5.05%.

However, investors should be wary of statistics such as these as prospects in cities can change quite rapidly. For example, a brief visit to a city like Manchester would reveal the sheer amount of new development that is going on. Once hundreds of new apartments come onto the market the rental market balance could change considerably.

As always, any new investment should be preceded by thorough research.

Source: GoCompare / Mortgage Solutions

Image – Hilton, Manchester

©1999 – Present | Parkmatic Publications Ltd. All rights reserved | LandlordZONE® – The GoCompare website to finds best areas for buy to let | LandlordZONE.

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Right to Rent: Windrush guidance for landlords

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Landlords renting to Windrush immigrants, who have a right to live in the UK, but may not have the documents to prove it, can apply for a Positive Right to Rent Notice (PRRN). The information is included in an updated Right to Rent guide published by the Government. Landlords whose Windrush tenants do not have […]

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Tax when selling Buy to Let

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We bought our first house in 1999, lived in it for a few years, then moved out and our in-laws lived there (rent free) until 2012.

Between 2012 and 2018 the property was rented and a few years ago we converted the mortgage to buy-to-let.

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Paragon release Limited edition BTL products

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Paragon have released a new range of Limited Edition Buy to Let mortgage products.

The first range is Portfolio products which are designed for professional landlords who own four or more mortgaged properties, and those operating as limited companies and limited liability partnerships.

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RLA gives evidence to HCLG committee on Hackitt report

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The Hackitt report into building regulations should include more information about the lifetime management of buildings once occupied, RLA Policy Manager John Stewart told a committee of MPs this week. The evidence session was held by the Ministry of Housing, Communities and Local Government Committee and was the first the first following the publication of […]

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Bad Tenants Rogue Landlords Channel 5 8pm Thursday 5th July

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In North East London, Landlord Steve Moreno has been put in an extremely stressful situation. His problems began after deciding to sell his flat in Lea in order to purchase a property with his girlfriend.

Having informed his tenant

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