Respond now or get 3 year tenancies!

Communities Secretary, James Brokenshire, is reported by the Sun to back calls introducing 3 year tenancies in the Ministry of Housing, Communities and Local Government consultation titled, ‘Overcoming the Barriers to Longer Tenancies in the Private Rented Sector.’

The Decision on the consultation could possibly be taken as early as next week so landlords are urged to respond now if they haven’t already.

Please Click Here to read and respond to the full consultation

Please also read Three-year tenancy agreements

and Could landlords be incentivised to offer longer term tenancies?

This could cause mayhem and I have prepared a list of questions myself to put to the consultation I would like answers to:

1. What makes you think people want longer tenancies? And why was 3 years chosen?

2. How much research have you done which has led you to the conclusion that blanket 3-year tenancies are desirable? We obviously need to see the empirical basis for this assumption.

3. If it is deemed desirable, then by whom? By both parties who would be subject to it – i.e. landlords and tenants, or just by one of those parties? If so, since when was one-sided legislation deemed legitimate?

4. How many migrant workers are in rented housing and how many current tenants in this category want 3-year tenancies? And how many new tenants in this category are likely to arrive, wanting 3-year tenancies? How can this be known? In fact, many tenants ask for one to three month tenancy agreements; what happens to them?

5. How many students want 3-year tenancies? As you state, 12 month terms are essential for them, so this is a definite exemption.

6. Do you think it is fair on tenants in shared housing if the landlord is unable to evict a tenant who may be making their lives hell, and yet because that tenant pays their rent and their behaviour isn’t criminal per se – they get security of tenure and either ruin it for other tenants and neighbours or cause other tenants to leave, making it impossible for the landlord to rent out the other rooms – presumably while waiting for the 3 years to elapse? Whose rights are being protected here? And how would this help with the housing shortage?

7. The same question regarding ‘neighbours from hell’? Is it right that the landlord be stopped from evicting tenants who make their neighbours’ lives hell (eg by playing loud music)?

8. How many mobile workers and/or young professionals want 3-year tenancies? How do you know this? If they don’t want 3-year tenancies is it right for these to be imposed on them because of a perception that a different class of tenant may want 3-year tenancies?

9. Do you think landlords will take risks with lower-paid tenants, by giving them 3-year tenancies, or do you think they will select the least risky client groups – and they will be able to, as supply is now on the wane because of Government ‘disincentivisation’ of the sector?

10. Do you not think this will also happen with regard to the group you purport to advocate for ‘ ‘families with children?’ It will be preferable for many landlords to steer away from providing for these tenants if they feel this would tie them into lengthy arrangements, meaning the exact opposite result being achieved to that which is allegedly sought (I say ‘allegedly’ as there is a clear political motive here – to attempt to woo tenants; a lost cause of course, as they generally vote Labour).

11. What will you do about the fact that many landlords are in lengthy mortgage terms and their lenders would never allow 3-year tenancies?

12. Are you willing to pay the costs landlords would face if they were in breach of their contract with their lender because of a law passed by Government?

12. You quote research by the anti-landlord ‘charity’ Shelter, stating that various lenders will allow longer tenancies, but many landlords have long-term mortgages which it would be impossible or extremely expensive to extricate themselves from. In many cases, portfolio landlords would lose hundreds of thousands of pounds if they had to follow this process (as they would face all the remortgage costs and higher interest rates, added up over many years).

13. Do you think imposing a minimum of 3-year tenancies will lead people who are going away on a work contract for one year or two, to let out their houses on 3-year contracts? Or do you think they will leave those properties empty as they would not be able to live in their own property when they returned? Have you estimated the number of properties that would then not be let out, but left empty?

14. Are you going to combine new 3-year tenancies with provisions for obtaining possession of properties more quickly from rogue tenants (who break the terms of the contract, for example by not paying rent and causing damage)? This currently takes a minimum of 5 months – but usually more – costing landlords an average of more than £2,000 each time? You note this to be the case, but you offer nothing to help the landlord gain possession more quickly.

15. Are rogue tenants going to continue to be rewarded by being given scarce social housing after they have caused landlords huge stress and losses during the eviction process, usually paying no rent and waiting until they are physically evicted by bailiffs, thus maximising their period of rent-free accommodation? And will they still not be made to pay back anything they owe private landlords through third party deductions?

16. Is the (arbitrary) 3-year tenancy idea going to be looked at in isolation, with no regard to other related issues and other existing and proposed regulations against private landlords, which are already hammering the sector? Is anyone in Government doing a tally of all the national and local regulations being imposed on landlords and adding up the costs of no longer allowing landlords to offset all their costs but treating costs as profit (bizarre and unjust), of local licensing schemes, of council moves to multiply council tax liabilities on HMOs, of fining landlords (and possibly giving them a criminal record) when they fail in their new duty as custom officials (when actual custom officials have failed in their paid job)?

17. What happens to people who have a visa of less than 3 years? If landlords rent to them, then they won’t be able to evict them, but by keeping them landlords will face criminal sanctions.

18. What percentage of landlords leaving the PRS have you predicted this latest bright idea will cause? And what forecasts have you made of the number of properties which will no longer be available for rent (as some of the exiting landlords may have several/many rented properties)?
19. If, has been mentioned, tenants can leave at short notice, can you explain what use a contract is if one side can completely disregard it with no consequences? You also state at one point that you would like tenants to give 3 months notice, but at another point in your consultation document you say 2 months. Which is it?

20. As the idea is clearly about giving tenants the power in the contract, what about letting tenants decide if they want to commit to 2 months, 6 months, 12 months, 18 months and so on, rather than imposing an arbitrary 3 years?

21. How much have you predicted will be lost to the economy by landlords leaving and the loss of work to associated trades? There are 46,000 fewer properties are in the PRS now, compared to last year and it is predicted there will be a further loss of 133,000 homes this year (clearly due to the raft of measures by Government). These losses to the rented sector are likely to accelerate, especially as Section 24 of the Finance (no.2) Act 2015 starts to bite.

22. Why are you acting on the proposals of mostly left wing, anti-landlord interest groups who keep dreaming up new regulations which are causing great damage to the PRS? You acknowledge that most landlords don’t want it, but that fact assumes no importance. What about this is Conservative?

23. Why do you not listen to the two million landlords, many of whom are experts on this subject?

24. Why have you stated that the leading cause of homelessness is the end of an AST? This is patent nonsense. The ending of the AST is the process and when landlords issue Sections 21 and 8 it is more often than not because the tenant has not paid the rent or has damaged the property. It is thus often the ‘tenant’s poor behaviour’ which is the cause of homelessness. As a comparison, if an employee is sacked for stealing, did the employer cause the unemployment or did the employee’s poor behaviour? Please stop repeating this slur as though housing PROVIDERS are responsible for homelessness.

25. Why do you want to get rid of the AST which has led to the expansion of supply in the PRS and been highly successful? Do you want the market to shrink to what it was before the introduction of the AST? Why are you trying to fix something that is not ‘broke?’ Constantly repeating the unfounded statement by certain groups that the ‘housing market is broken’ does not make it true. The private rented sector actually functions extremely well and is a critical and effective part of the economic and social infrastructure of the country. It should be allowed to get on with its job without this constant interference.

26. You say you are interested in respondents’ views on minimum tenancy lengths. I suggest one month. This is generally the shortest term tenants ask for, so my suggestion is ‘tenant-centred.’

27. You should also look at how Section 24 is contributing to homelessness levels, as a tax on turnover is clearly unsustainable and leads to increased costs for the consumer – tenants, in this case. Universal Credit is also contributing to this. So you might like to look at how Government intervention in the market is causing homelessness and put energy into reversing this rather than worrying about tenancy length.

28. You mention financial incentives. Landlords don’t need that. They need the abolition of the appalling Section 24 which is grossly unfair and disastrous for the PRS.

29. Is anyone going to listen to/read any of the submissions made or is the idea just going to be rubber-stamped, as happened with Section 24 of the Finance (no. 2) Act, where the Committee Chair admitted that no-one had had time to read the large number of detailed and expert submissions that had been sought?

30. Do you think it is fair to ask people to give up their valuable time presenting arguments which will contradict your preconceptions, when we all know that you will not pay them the blindest bit of attention?

Dr Rosalind Beck
I am a portfolio landlord of 20 years standing.

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