In an effort to give tenants more stability, the Government has proposed introducing compulsory three-year tenancies for UK landlords. However, a new survey conducted by buy-to-let mortgage provider Paragon has revealed that 32% of landlords would be less likely to buy new properties if these new rules are introduced. This is due to a variety of factors including difficulties with mortgages and concerns about regaining control of property. What's more, landlords anticipate the change could create unfair biases toward particular tenant groups.
Proposed new rules
A new model for tenancy agreements, based on a three-year minimum lease, is at the heart of the consultation. The Government is also considering other issues, including the notice period landlords must give tenants prior to eviction, what grounds landlords need to evict tenants, and if new rules are needed to dictate rent increases.
When surveyed, landlords said a compulsory three-year agreement would make mobile tenants less appealing. This would effect groups such as students (45%), migrant workers (40%) and young singles (24%). In contrast, older couples (36%), retirees (29%), families (25%) and older singles (25%) would become more appealing tenants. Given under-35s represent 44% of current tenants, according to data in the Government consultation document, this creates a difficult situation.
Additionally, many mortgage providers do not cater for three-year tenancies. This could be an issue for buy-to-let investors and existing landlords whose mortgages may become subject to renegotiation.
The importance of engagement
As the Government have not yet reached a final conclusion, this survey may enable landlords to have more of a voice in shaping government policy. The National Landlords Association has already submitted feedback, raising questions over how landlords would tailor leases to meet varying tenants' requirements and how they would regain control of property if necessary.
While the consultation is underway, landlords may wish to consider engaging more closely with tenants. Understanding their needs, concerns and any risks they may represent will help landlords transition to new regulations more comfortably. If you are a landlord concerned about problematic tenants, contact Dukes Bailiffs for help recovering property and recouping unpaid rent.