Long duration ASTs to combat proposed changes?

Hi Andrew, Under current legislation if it is a private individual's main residence then it is considered an AST regardless of the contract.

this issue is going to come to a head.

Putting aside the obvious implications from the PRS LL view, the councils themselves are going to be stuffed.

At present most councils will only provide a deposit and RIA to a benefit recipient IF they find a private property to let, on the basis the LL offers a min 12mth contract.

If the legislation kills min term contracts dead, then councils can't demand a min period. That's going to play havoc with their cash flow and they are going to want to think very carefully who they want to fund...

Councils are therefore going to have to pay out for every single tenancy a PRS LL may offer if they want to get anyone off their list, with no guarantee that the same person wont be back on their list again within the first 12 months.....

Using a Deed instead of an AST for longer-term tenancies sounds like a smart move, especially if you have reliable tenants or promising prospects with great references. It could really simplify things with less turnover and more predictable planning.

Including an annual inflation increase clause shows foresight in managing costs over time. While new legislation is always a consideration, Deeds generally offer more flexibility for longer agreements compared to ASTs.

I'd say go for it, but staying updated on any potential changes in rental laws is a good idea. Let's hope it all works out smoothly for you.

Reply to the comment left by havens havens at 15/07/2024 - 10:35
The agreement will still be technically an AST. A Deed just means it's for more than three years, so it has to be signed "as a Deed" rather than "under hand".

There is no maximum term for an AST.

If the agreement is to be a Deed then it has to be prepared by a solicitor. If for seven years or more it has to be registered at the Land Registry.

Andrew's plan may not work as he intends. I can;t see that it will circumvent The Housing Act.

In my view it would be absolute madness. Five years is a long time and a tenants circumstances can change. So can a landlords. So can the law or the housing market. The landlord would be tied into the arrangement regardless of their own needs. However, the tenant's lock-in to the contract is only theoretical since it would be a very foolish landlord who tried to hold a tenant to a long term deal that they could no longer afford or where they had to move for work or marriage or to buy a place or.....

Reply to the comment left by DPT at 15/07/2024 - 16:12
It would give the tenant security of tenure.

There could be a break clause that allows the landlord to regain possession if they decide to sell (with a suitable notice period). This would allow landlords to regain possession if the law changes to make keeping the tenants undesirable.

Other than that, if the tenant abides by the terms of the agreement, five years doesn’t seem to be an issue.

I just wouldn’t add a rent review clause.

I think there’s a difference between ‘being a landlord’ and ‘being an investor’. In ideal circumstances and with constant legislation and taxation rules, I’d have been a landlord until I die. My children would have followed in my footsteps. Anti-landlord sentiment makes this impossible.