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
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