Landlords react against three-year tenancy plans

2 July 2018
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The main body representing landlords’ interests has reacted angrily to government plans to introduce mandatory three-year tenancies, with a six-month break clause, to give tenants more security.

Tenants typically stay in their homes for nearly four years, according to government figures. However, 81% of tenancy agreements are assured shorthold tenancies with a minimum fixed term of six or 12 months. 

Although tenants and landlords can agree to longer terms, most don’t do so. The government says this can lead to tenants feeling insecure, unable to challenge poor property standards for fear of tenancies being terminated, and unable to plan for their future. 

Secretary of State for Communities James Brokenshire MP explains: “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.”

In response, the National Landlords Association (NLA) says that the new proposals will be too “rigid” and that it has been “misled”.

Richard Lambert, the NLA’s chief executive, says that when plans for a consultation on longer tenancies were announced last October, he believed the “tone of the discussion” was one of “consultation and encouragement”. He now says he feels “misled” as he believes the new plans should be about making existing tenancy agreements more flexible rather than introducing a minimum three-year rental contract.

He points out that NLA research with tenants has found that around 40% of tenants want longer tenancies, but 40% are happy with the status quo.

He says: “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,” he adds. “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.”

The consultation, which will seek views from landlords, tenants and related organisations on the three-year tenancy plan and other ways to introduce a longer minimum tenancy, will run until 26 August 2018.  

Comments

In reply to by chrisrich (not verified)

I take it you are not a landlord, or you have not suffered the financial loss that many of us have due to bad tenants.

In reply to by anonymous_stub (not verified)

it would be nice to have at least 12 months assured shorthold tenancy agreement prior to approving a longer stay to access the suitability of tenants renting, by all means after 12 months a longer lease could be presented or applied for.

In reply to by anonymous_stub (not verified)

I definitely don't agree with the government's proposals. I live above a flat that is rented out. Constant problems with tenants that is solved by the landlord not renewing the tenancy. The last tenant owned a £90,000 Audi, but left the place trashed. Making the minimum Tenancy 3 years will create a nightmare for landlords and neighbours alike. From experience all tenants have a shelf life after which they become troublesome. The proposed changes are also going backwards.

In reply to by anonymous_stub (not verified)

Having good tenants who respect my property and pay the rent to me on time are worth a 3 year tenancy even though I disagree with this principal. If renters need security then surely they should buy their own property.The 1 year tenancy acts as an insurance for me. The tenants pay their rent promptly and keep the house in good condition, In turn I re new the tenancy. I am not responsible to provide housing to any one who does not pay rent or abuse the house or neighbors.I need to have flexibility with my assets as do all businesses. Selling a property with tenants in situ reduces the market in which to sell and the property value. If the government would provide some sort of tax releif, I.E on mortgage interest, and an quick and easy repossession then I would be more in tune with this idea.However the government has hooked on to a vote winner here, stolen from the Labour Party, and are exploiting the fact that there are many ruthless disgusting landlords out there and unfortunately tarnishing us all with the same brush.

In reply to by Kathleen Cooke (not verified)

I think most people would agree that the interests of the landlord do not trump the interests of the tenant. The landlord has somewhere to live already, he's secure in his property and doesn't have to worry about what will happen in 6-12 months time, if the tenant defaults on payment or is late of course this is not ideal but like any business that's the guaranteed risk, all businesses must take losses at some point. My concern is with the tenant who is working flat out to try and pay over the odds to live in someone's private property not knowing whether that will still be their address in 12 months time or if the landlord will decide he wants his property back or wants to push the rent up and give it to someone richer who can afford to fund his lifestyle. I'm worried about the financial loss the tenant suffers by paying 3x more than he would in social housing to live in private accommodation.

In reply to by anonymous_stub (not verified)

The following are problems for non-professional landlords with one or two properties and no substantial savings1. our problem is less than three years left on n interest only mortgage which will not be extended2. rather than leave our holiday home empty half the year,like cornwall, we rent it for six month only from 1st sept which has enabled teachers nurses etc new to the area to have somewhere to live while checking the area and seeking long term accommodation and this gives benefit to the community3. Widowed spouses could end up with a long term sitting tenant reducing the value of the property

In reply to by anonymous_stub (not verified)

landlords don't want empty properties, so a good tenant staying a long time is good for us, problem is going to be the bad tenants who don't pay, these have to be evicted asap. for every one bad landlord there are at least 10 bad tenants, landlords are going to be very selective who they rent to, which is going to cause big problems for people looking to rent and a big increase in the homeless.

In reply to by anonymous_stub (not verified)

I am a landlord, owning two three bedroom houses and two one bedroom flats. In my experience, the one bedroom flats change tenants regularly, with many tenants leaving after 6 months. The reasons are varied, single people want to to move on if they meet a partner, couples either find they are not compatible when living together, or they move on to a bigger property. If the new law makes it mandatory for the tenants to sign a three year contract, they may not be willing to rent, or they will just 'up sticks' and move without giving notice. This has happened with one tenant leaving owing rent and although he was traced (at considerable expense) he was living at his parent's and had no assets. There was a mandatory period where a notice had to placed on the property giving him time to remove his possession so it was not possible to find another tenant causing more financial loss.I use the rents on the properties to supplement my pension income. It was a planned strategy. Private landlords are not all bad landlords. In many cases we are the victims of unscrupulous tenants who know the law is on their side. If a tenant is given notice to leave (because of unpaid rent) councils are now telling them to stay in the property until the landlord takes court action. This can take months to get them evicted, meantime no rent, court costs and bailiffs fees.There is insufficient social housing and until that is addressed private landlords provide a much needed service to the housing situation. We should be rewarded, not punished.

In reply to by anonymous_stub (not verified)

It would be nice to have at least a 12 months Assured Shorthold Tenancy Agreement in place prior to offering and longer lease .. This is for both parties to access the the suitability of the tenancy prior to a long term arrangement.

In reply to by anonymous_stub (not verified)

Has the 'Government' consulted with mortgage lenders about changing their terms to allow 3 year tenancies? - I doubt it!

In reply to by anonymous_stub (not verified)

I inherited a home when my husband passed away. By the terms of his Will, I am obliged to retain this and pass it to his children by his first marriage when I die. Because of the size of the property and the rates in that area, I cannot afford to live there myself. I rent it out to provide income, and have been obliged to improve the property (taking out loans to do so)in order to attract good paying tenants. I have previously had at least one bad tenant ,who absconded owing many months of rent, and taking the property keys. Significant damage was also done, and I was unable to trace the individual concerned. This law could have an adverse effect if tenants run into financial difficulties (which might happen to anyone).

In reply to by anonymous_stub (not verified)

My Buy To Let Mortgage stipulates a tenancy of 12 months only which needes addressing.Whilst both my tenants have renewed, 1 in her 4th year & 1 in his 3rd, how will this work with a view to them either choosing to leave or me wishing to have the property vacated

In reply to by anonymous_stub (not verified)

I've voted in the poll but I have the urge to comment also. Obviously landlords will be whinging about this proposal but I for one hope that these proposals are brought into law. Three years is about right, renters should not have to live year to year worrying about whether or not the lease will be renewed by the landlord, I imagine a house cannot feel like home to anyone who only has a 6 or 12 month lease, you've only just settled down after 6 months so to have 30 more guaranteed after it gives the stability that people have a right to. Whatever the proposal someone was going to be aggrieved but I for one would rather that be the landlord than the tenant so let's hope this gets through.

In reply to by David Butterfield (not verified)

The opportunity already exists without further legislation to have a 12 month tenancy and is what I offer like many landlords wanting long term lets - a 12 month tenancy with a 6 month break clause on either side if either are unhappy. This 12 month term is more of a statement of intent on both sides, that both parties are looking for a long term let. Almost all of my tenants, (over 18 years as a landlord) then go onto a periodical basis contract and invariably end up staying for many years. Mind you the other reasons are that I act as promptly as possible to carry out repairs etc and very rarely ever increase the rent during their tenancy. Would like to say I never have problem tenants but sadly not, however most tenants as are landlords are honourable people and we enjoy a good landlord/tenant relationship.This works perfectly well for both sides and see no advantages, only problems in offering longer term contracts from the outset.

In reply to by Jeremy Taylor (not verified)

We live next door to a flat where we had ‘a neighbour from hell’. Loud parties, broken windows, rubbish not put in bins for collection. The landlord took action, but it took over six months to get her out, at great expense and he is having to refurbish the flat because of the damage which was caused. Nine months of no rent and considerable cost to put the flat into a rentable condition.

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