Industry news


Government proposes longer tenancies but no rent controls for RPS


way of giving people greater security in the fastest growing sector of the housing market. A consultation exercise on the minimum


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tenancy term will now run until the end of the August. Most private tenants currently have contracts of six or 12 months and Ministers say longer agreements would allow them to put down roots in local communitites. Tenants would also be able to leave early under the new plans while landlords would get more financial security. However, the proposal has been attacked as


not being fit for purpose by both the Labour Party and a major landlords group. The National Landlords Association derided it as a throwback to an earlier, over-regulated time that fails to address the needs for a more flexible system. Meanwhile opposition housing spokesman


John Healey said: "Any fresh help for renters is welcome but this latest promise is meaningless if landlords can still force tenants out by hiking up the rent.” He said Labour’s plans included caps on rent rises, an end to no-fault evictions and protection against substandard properties. NLA Chief Executive Officer Richard


Lambert said: "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 added “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.” Mr Lambert accused the Government of having misled private landlords over the proposals in the past couple of years.


SHORT NOTICE Official figures show approximately 20 per cent of all households live in the private rented sector, double the figure it was 20 years ago. Renters stay in a property for an average of four years but most have shorter contracts, typically just six months under the assured shorthold tenancy model. These can be ended by landlords at very short notice, often without giving a reason.


minimum tenancy term of three years for privately rented homes is being considered by the Government as a


Official figures show approximately 20 per cent of all households live in the private rented sector, double the figure it was 20 years ago


Exemptions to the new rules could apply to


certain types of tenancy, such as for students who usually want accommodation for between nine months and two years, linked to college and university academic years. If approved, the new longer tenancies would


bridge some of the gap in security of tenure between privately rented properties and council homes. Two years ago the Government ended the practice of lifetime tenancies being granted to council tenants, with fixed term tenancies of between two and five years (or upto ten years where young children are involved) now being the norm for new council tenants. Announcing the consultation, Housing


Secretary James Brokenshire 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." Mr Lambert said NLA research finds


consistently that around 40 per cent of tenants want longer tenancies, but a smilar number do not. More than 50 per cent of tenants consistently say they are happy with the tenancy length they were offered, and 20 per cent say that when they asked for a longer tenancy, they got it. It is feared the proposals could have a


negative impact on the buy-to-let sector, which is already showing signs of stress following changes in the tax system and a proposed ban on fees which have encouraged many smaller landlords to sell some or all of their properties. It may also encourage lenders to increase interest rates or impose other conditions to compensate for landlords having less flexibility over disposing of properties.


Jump in landlords leaving the private rental market


Despite a continuing growth in demand for rental properties, the private rented sector is seeing growing numbers of landlords selling their buy-to- let properties. Recent figures from ARLA Propertymark reveal


rises in the number of landlords selling properties to their highest level since 2015 with the highest numbers of landlords leaving the sector in London and Wales. The number of rental properties managed by letting agents was 179 per branch on average, down from 183 in March last year and a figure of 193 in 2015. This is happening despite increases in levels of


demand for rental properties with a nine per cent rise in the number of prospective tenants registering with letting agents and member branches. Demand was the highest in Wales, followed by the East Midlands. A quarter of branches also saw rents rise. Some


56 per cent of tenants in the East Midlands saw their rents rise while it was just 11 per cent in London and the North East. The average length of tenancy for properties let and managed by ARLA branches was 18 months. David Cox, ARLA Propertymark Chief


Executive, said the “barrage” of legislative changes that landlords have faced over the past few years, combined with political uncertainty has meant the BTL market is becoming increasingly unattractive to investors. Cox said the statistics showed landlords were


either hiking rents for tenants or choosing to exit the market altogether to avoid facing the increased costs incurred. “This in turn is hitting renters most, at a time


when a huge number of people rely on the rented sector. As demand for private rented homes massively continues to outstrip supply, the Government can no longer divert its attention from the broken housing market. The recent news that the Government is regulating the industry is a step in the right direction, but ultimately we just need more homes,” he said.


www.housingmmonline.co.uk | HMM July 2018 | 7


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