A proposed shake up of the rental sectors will impact on landlords as a consultation planned for today will effectively create open-end tenancies.
This proposed change to legislation will prevent landlords from evicting tenants with two months’ notice after their fixed-term contract has concluded and where no fault has been established. The Government is consulting on a change in the legislation in an effort to reduce family homelessness, however in doing so have put the emphasis on landlords to offer lengthier tenancy agreements and have given them less power to evict tenants who are complying with their fixed-term contract.
The new proposal will see court processes being expedited so landlords are able to quickly and effortlessly regain their property if a tenant falls into rent arrears or damages the property. The Government hopes this will result in landlords having more security by knowing disputes will be resolved rapidly.
It’s important to remember as a landlord the ‘no fault’ ban is at present only a proposal; you can still employ a Section 21 to remove a tenant or tenants who are out of contract. However, we would suggest you seek legal advice. Having a tenancy agreement that reflects or anticipates such changes in tenancy law is paramount. Partner, Will Oakes is our landlord and tenant expert, he can advise you on the implications of a Section 8 and 21.
Going forward the Government plan to reduce the uncertainty and limit the grey area between open-ended tenancies and possession claims. Within the current Brexit climate this would be required for landlords to continue to invest in new build properties. It is estimated the UK have over two million landlords, owning around five million properties. These figures reflect the growing demand caused by generation rent; a term used to describe the rental culture of generation Y. Whilst the demand is growing many landlords are finding having a property portfolio is less profitable and more challenging, changes in stamp duty and mortgage interest relief being the main cause.
Due to this, many landlords are now opting to purchase their buy to let properties under a company, this allows landlords to benefit from company tax law and mitigate any inheritance tax. Managing Partner, Nick Attwells oversees our commercial property team and can advise you on all the implications. One-hour property advice packages are available for £190 plus VAT.
For more information on landlord and tenant law please call Will Oakes on 01206 239764. Additional information can also be found by clicking on the links within this blog.