Periodic tenancies likely to result in a mass exodus of private landlords

The government’s plans to introduce periodic tenancies are not fit for purpose and will almost certainly lead to a mass exodus of landlords from the PRS, according to Propertymark.

The industry body has submitted evidence to the Levelling Up, Housing and Communities Committee’s Reforming the Private Rented Sector inquiry.

It warns that fewer homes may be available to renters if reform of the private rented sector does not equally consider the rights and needs of letting agents and their landlords with those of tenants.

In its response to the Levelling Up, Housing and Communities Committee’s renters’ reform inquiry, Propertymark expressed concern around the lack of long-term security for property owners who make them available for rent as a result of plans to move away from fixed-term tenancies.

It welcomes the UK government’s commitment in its A Fairer Rented Sector white paper not to introduce rent controls but questions the robustness of revised grounds for possession.

Without Section 21, Propertymark says the landlords its member agents represent still need the ability to regain possession of their properties in reasonable circumstances.

Specifically, more consideration needs to be given to how workable grounds relating to anti-social behaviour will be. Landlords currently rely on serving a Section 21 in these situations as the other existing grounds require a tenant to be convicted, which is not always likely.

Timothy Douglas

It also calls for changes to the court process to speed up possessions, and for a full pilot of the removal of Section 21, mediation, and the new court process to measure the impact before they are rolled out across the country.

Timothy Douglas, head of policy and campaigns for Propertymark, said: “Economics are an important factor for investors in the private rented sector, but for many a lot also rides on sentiment and certainty.

“There are elements of the white paper that if progressed will create further risk and our member agents say they have been enough to convince some of their landlords to sell up or indicate an intention to. Our research shows many properties sold off by landlords are not returning to the rental market.

“If landlords reject the changes and no longer want to make their properties available for rent, there is a danger the private rented sector will become smaller and even more expensive. The knock-on effect will see local authorities under unmanageable pressure to help many households secure a suitable alternative against a backdrop of significant under-supply of affordable homes to rent.”

 

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6 Comments

  1. Deltic2130

    Along with every other measure the govt have taken to force a terrible situation onto the sector! Let’s deal with Section 24 and SDLT first, eh? Then all the EPC nonsense. Then extreme licensing and legislation. Do that BEFORE this current round of destructive lunacy and we might actually see some benefit to society!

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  2. Mrlondon52

    “certainly lead to a mass exodus” – what tosh. Propertymark loses credibility when it becomes alarmist.

    All the tax changes to mortgage relief and the 3% surcharge have contributed to a 10% reduction in the PRS – alongside more support and better mortgage rates for FTB.

    So now periodic tenancies (which, by the way, most agents use now) are going to create a mass exodus?

    Its not going to happen.

    I think they’d be better off putting together a more rational, professionl and grown-up hypothesis on how ownership will change.

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    1. The_Maluka

      I agree that it is not going to happen, it has already happened.  There is a grave shortage of rental accommodation.

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    2. A W

      No, most agents don’t use periodic tenancies. I can guarantee 100% of agents use AST’s which are fixed term tenancies.
      Landlords may allow a tenancy to become periodic, but literally 0% of them start out that way (at least since 1997).
       
      Also this article isnt about “ownership”, it is about the PRS. 

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    3. Ian Narbeth

      “So now periodic tenancies (which, by the way, most agents use now) are going to create a mass exodus?” Yes, because the landlord knows at the outset that he has a minimum period of occupancy. Certainly some tenancies become periodic after the fixed tern ends but in many cases they are renewed for a further fixed term. If the complaint is that landlords evict at a whim, how does allowing tenants to depart at a whim help?

      The student letting market will be disrupted. People letting out their property while they work elsewhere for a year or so will not know that they will have income whilst they are away.

      If tenants give notice to leave early, will letting agents rebate part of their fee?  After all a fee of 10% plus VAT of the annual rent for a 3 month tenancy doesn’t work for landlords.

       

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  3. Will2

    S21 abolition is being used by politicans as a tenant vote purchase as thatcher did with the right to buy.  Landlords used s21 for a quicker and better solution  when tenants caused problems rather than s8 which gave scope to sharp lawyers to make a bundle.  If a landlord had a good tenant they would be encouraged to stay; as without the tenant the landlord does not have a business.  This has all been about Government buying Votes and political ideaology by people like Shelter, you know the housing charity that houses no one.  These political groups are highly competent in spin and the media, of course, like a good story and someone to to attack. Never good news stories with that lot.  Who are the losers?  actually tenants the very people these fools claim to be helping.  Less housing, higher demand and less supply. This is all schoolboy economics which even politicians should be able to understand.  It is being reported that there is a 25% decrease in supply which then equates, pretty much to a 25% increase in demand; a double whamy.  Landlords that stay will benefit from higher rents, a better selection of tenants to choose from when letting. The losers will be the poorer tenants with a poor credit record, those on benefits, those unable to prove they would make excellent tenants. Councils will have even greater difficulty in housing people, particularly the rogue councils who tell tenants to ignore initial court orders (putting the tenant in comtempt of court) and insisting they wait until the bailif evicts them bullying them by threatening with “you made yourself homeless trick”. Dispicable  and unprofessional behaviour from councils.

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