Periodic contracts – financial nightmare for landlords?

Periodic contracts – financial nightmare for landlords?

9:01 AM, 16th January 2025, About 6 days ago 51

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With the new Renters Reform Bill are you concerned about the move to periodic contracts?

We bought our flat in 2007, just before the crash. It is still in negative equity and will remain so for the foreseeable future. We bought a buy to let with the aim of topping up our pension. It has been and continues to be a financial drain and we are in a negative situation every month due to the high interest rates.

We are now retired, and due to the slow market, we have been unable to sell our flat. Periodic contracts are a huge worry for us and will cause us extra burden financially. As we all know the cost of finding new tenants and drawing up contracts is expensive.

A 12-month fixed-term contract in the first year gives us peace of mind. The move to periodic is so restrictive and could incur extra expense.

We have always been very caring landlords and the happiness of our tenants is a priority. I always reply and sort out any problems immediately. My husband now has dementia, and we need to sell but can’t. The RRB is so restrictive, stating we can’t sell in the first year.

All we want is for fixed term contracts to be allowed in the first year of tenancy and then change to AST as we have always had.

How can we make our voices heard? Do other landlords agree?

What other investment is there where so many restrictions are placed on an asset that you own?

Landlords are constantly vilified but it is proven that so many landlords are like us. It’s a nightmare

Periodic contracts are a huge worry to us.

Karen


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Slooky

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8:52 AM, 18th January 2025, About 4 days ago

Reply to the comment left by Andrew57 at 17/01/2025 - 21:52
I don't think undercutting the rent (which I already do) is going to stop a serial mover.

Peter Merrick

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9:12 AM, 18th January 2025, About 4 days ago

Reply to the comment left by Clint at 17/01/2025 - 18:03
I always tell prospective tenants before they sign that they can move out at any time as long as they give me reasonable notice, ideally a month. I think for some this can be a selling point, knowing that they aren't tied down if circumstances change.

I've maybe had two or three at most who rented a room and didn't intend to stay more than a few weeks, but I replaced them soon enough after getting the vacuum cleaner out. Occasionally between tenancies I've also rented our a room by the week at a higher rate. This may be a way to go, with rent front loaded at a higher rate, then reducing after the tenant has been there for several months.

I've only once had a tenant leave a property rental after a short stay, because the previous tenant had failed to tell me about a number of issues that the new tenant then complained about, and they also weren't happy about not being able to smoke inside the house. After fixing said issues, the next tenant has been there for about 8 years now.

Judith Wordsworth

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10:47 AM, 18th January 2025, About 4 days ago

Reply to the comment left by John Adair at 16/01/2025 - 11:10
They won’t get back. Well not easily.

Courts will tell them, as some are already doing, use the rent received to rent somewhere for yourself.

Judith Wordsworth

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10:54 AM, 18th January 2025, About 4 days ago

“ All we want is for fixed term contracts to be allowed in the first year of tenancy and then change to AST as we have always had.”

The initial fixed term was already an AST. Never needed to reissue. Just allowed to roll on to a periodic tenancy with a rolling on /periodic tenancy noted in the Tenancy Agreement

Clint

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13:16 PM, 18th January 2025, About 4 days ago

Reply to the comment left by Slooky at 18/01/2025 - 08:52
I agree and the serial movers tend to leave a trail owing rent and always somehow manage to get accommodation. I always get tenants who owe me money a CCJ even if I know I will not get my money back which is virtually all the time unless they have a guarantor.

Clint

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13:46 PM, 18th January 2025, About 4 days ago

Reply to the comment left by Judith Wordsworth at 18/01/2025 - 10:54I think if they said only 6 months fixed term was allowed and then periodic I would be happy with that as, I have always been giving a fixed term of six months so both parties can use it is a trial period.
I would normally be happy with 4 months fixed term as it would show some commitment although, I am currently selling up as the RRB is just not going to work for me.
I need to live with time to spare for living.

John Adair

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15:33 PM, 18th January 2025, About 4 days ago

also, will this affect providers who normally only do Holiday / Contractors / short-term lets - After all those are usually a lot more expensive than long term so there will be a reason to deceive ...

NewYorkie

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16:12 PM, 18th January 2025, About 4 days ago

Reply to the comment left by Slooky at 17/01/2025 - 20:26
We have experienced this ourselves recently. A friend went through a bad divorce and was in such a state, that she really couldn't function very well. Fortunately, we were planning to redecorate an empty house, and we're able to step in immediately. Otherwise she would have been homeless [coming from a 6 bedroom home!]. She said she needed the house for only 6 months, and was on 'mates rates', but after 6 months, she still hadn't found somewhere, and wanted another 6 months. We agreed but raised the rent to normal which she accepted, and a month later, said she was moving out in a month. We were happy with that [the relationship had soured], but if we had gone through the remarketing and paid a tenant find fee, we'd have been pretty p**sed off.

We've also experienced a couple wanting short term accommodation, and willing to pay the premium for it being scarce. They were delayed in finishing building work and didn't want another 6 months AST. We agreed and it worked well for both sides. But I can see the RRB making this sort of thing commonplace. They will agree 6 months, then move when they want, leaving the landlord with an unexpected void and tenant find fee.

NewYorkie

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16:15 PM, 18th January 2025, About 4 days ago

Reply to the comment left by Peter Merrick at 18/01/2025 - 09:12Sounds like you're letting HMOs. I suspect the numbers are somewhat lower for a room than a whole house or flat.

NewYorkie

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16:18 PM, 18th January 2025, About 4 days ago

Reply to the comment left by John Adair at 18/01/2025 - 15:33
See my comment

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