Labour's proposals for rental properties

Not many of us could have avoided Labour's proposals for tenancies on the news last night.    

Labour have said that they want to provide tenants with stability by introducing a  rent cap and three year  tenancies.

So how will this affect landlords?

Rent Increases -  rents will be based on market value and reviews of rent could only be carried out once a year.  There sill be a statutory limit on rent in place and Landlords will be prevented from increasing rents any higher than that.

Length of Tenancies - tenancies will be for a fixed period of three years  with a 6 month probation period, followed by an automatic 2.5 year extension.  Tenants will be able to give one month's notice after 6 months, landlords however will  have to give 2 months notice and have good reasons for terminating the tenancy.  The examples given of good reasons are rent arrears and anti-social behaviour.   This will cause all sorts of difficulties in gaining possession - presumably you will have to wait until there are significant rent arrears or anti-social behaviour before issuing the 2 months notice, and then following that will have to go through the court process, thus extending the period for possession considerably.

I think this will have a huge affect on whether people decide to go into, or stay, in the rental market.  a fixed three year tenancy is going to put many landlords off, even when landlords want a longer tenancy I never advise entering into a tenancy that is any longer than a year.

There is also the issue with mortgages, I am not sure how many mortgage companies would be willing to grant mortgages if there is a three year tenancy.

If you do require any advice on tenancies please do not hesitate to either telephone me on 01623 448331 or email me at rbrough@fidler.co.uk

Rebecca