MNHQ here: Shelter's campaign for longer rental contracts

(180 Posts)
FinnMumsnet (MNHQ) Thu 16-Feb-17 14:54:04

Hello,

Shelter, whom we’re currently featuring as a Guest Campaign, are calling on the Housing Minister, Gavin Barwell, to give renters the option of secure five-year contracts. You can find out more and add your voice to their campaign here.

Shelter explain: “Renters would have the opportunity to stay in their home for a minimum of five years, but they wouldn’t be locked in. Renters with five year contracts would be able to leave their home at any time by giving two months’ notice. If their family grows or a new job opportunity comes up, they may well want to move. But if they don’t, they can be certain about where they’ll be living for the foreseeable future.

“Five-year tenancies would also give landlords more security, reducing periods of vacancy and lost rent. They would still be able to sell their home if they needed to.”

Last year, Shelter received this email from 'Rachel,' a Mumsnet user who had heard about the campaign; Rachel explains the impact that unstable and insecure renting is having on her and her young son’s life.

We know from discussions on-site that insecure private rents are an issue affecting many Mumsnet users -- and with 87% of respondents to our rent survey last year saying they would prefer to buy in an ideal world, we also know that, for an increasing number, private renting is the only option. It also seems to be an issue majorities of Mumsnet users would like to see action on:: our 2015 General Election survey found 80% support for tougher regulation of private landlords, alongside funds for tougher enforcement by Local Authorities, and 75% support for incentivising landlords through the tax system to offer secure, fixed-rate, long-term rentals. Both proposals had net backing from supporters of all political parties.

Feel free to find out more about Shelter’s campaign here.

Thanks,
MNHQ

scaryteacher Thu 16-Feb-17 16:00:45

I rent in Belgium and we have 3,6 and 9 year contracts here. If you leave during the three year, you are liable for all the rent iirc.

Longer tenancies could be good, but there must be a break point for the l/l as well if they want the house back. If you want 5 year tenancies, then notice should be 3 months either side.

If you look at some of the continental models, it is different with a longer lease. Everything I pay for as a landlord in the UK, I have to pay for as a tenant here, insurance, boiler servicing, gardening, maintenance, and the bond is substantial as well, and won't be released until the l/l indicates that it can be. It is held in a bank account.

The l/l would have to be able to ensure that their property was being looked after, so I hope inspections would still be able to be continued.

KP86 Thu 16-Feb-17 16:23:16

Scaryteacher, what is the benefit of renting then? It seems like you're paying the entire cost of living in that house except it's not yours to keep at the end! Are mortgages significantly more expensive than rent?

RortyCrankle Thu 16-Feb-17 17:06:43

I am not a landlord but can only see this resulting in there being far fewer homes available to rent. For example a person may inherit a house and not be in a position to immediately sell for whatever reason, so the house is rented out for, say, a year. Under the new rules they will not want the house tied up for a potential five years, so house remains empty for the year. How is that helpful to anyone?

If they are going to impose five year tenancies, why would that not also apply to the tenant?

For both of the above reasons I think its a bad campaign.

Kennington Thu 16-Feb-17 17:09:24

I rent a property and think this is a good idea. 3 years might be more palatable to others though.
There should also be a register of landlords and basic safety checks should be obligatory.

specialsubject Thu 16-Feb-17 17:30:18

I know people who have such contracts under these terms already in England/Wales. So I'm not sure why such a campaign is needed. As far as I am aware there is no maximum term for a rental tenancy if the insurers/mortgage company (if applicable) allow it.

You say 'landlords would still be able to sell the house if needed'. Only to another landlord, as there will be a sitting tenant. If another landlord doesn't come along and the first one still needs to sell (ill, dead, lost job), what then? Perhaps Belgium has an answer.

I am all for dealing effectively with bad landlords and bad agents, by closing businesses and enforcing repairs, although what happens if the landlord won't pay? Presumably the property is then declared unfit to rent and the tenant has to leave.

Answers, please?????

ArchNotImpudent Thu 16-Feb-17 18:01:30

This is an interesting campaign, but the information on Shelter's website isn't sufficient to explain how it would work in practice.

Five-year tenancies would also give landlords more security, reducing periods of vacancy and lost rent.

How can this be so, if:

Renters with five year contracts would be able to leave their home at any time by giving two months’ notice.

What situation is the campaign trying to prevent? If a landlord has a good tenant, and doesn't intend to sell the property, why would they want to change the tenancy for the sake of it? If the landlord has a bad tenant, would they not evict the tenant anyway?

Is the campaign trying to say that the rental price would be fixed for five years? I don't see how that would be feasible, as the LL couldn't predict market conditions, mortgage interest rates etc. five years in the future. On the other hand, if the landlord was at liberty to adjust the rent, surely if they wanted to get rid of a tenant without eviction, they would just hike the rent to an unaffordable level?

I'm neither a landlord nor a tenant, so I'm asking these questions from a position of ignorance - apologies if I have missed anything.

thecatneuterer Thu 16-Feb-17 19:21:12

Five-year tenancies would also give landlords more security, reducing periods of vacancy and lost rent.

How can this be so, if:

Renters with five year contracts would be able to leave their home at any time by giving two months’ notice.

Arch my thoughts exactly. And I also agree with the rest of your post.

And I wonder if they have considered shared houses. Not to be able to evict someone from a shared house would be terrible. Sometimes people are just difficult to live with and wind up all the other tenants. For everyones' sake LLs need to be able to get rid of them.

RortyCrankle Thu 16-Feb-17 20:38:42

Additionally, what if the tenants decide to stop paying rent? What if the LL discovers they are not caring for the property at all, quite the reverse, to the extent that the property would be rendered uninhabitable by others and not in a fit state to be sold without major work. What do you say to the LL? Tough shit - they have a five year contract?

I know there are a lot of posters on MN who hate landlords. There is this totally illogical view that had the LL not acquired or bought the house, the tenants would somehow have been able to do so which completely ignores the fact that if the tenants had sufficient savings for a deposit they wouldn't be renting.

Take away LL's ability to remove bad tenants for five years and I reckon a large majority of those renting out single houses (as opposed to those who own multiple properties) will simply either leave it empty or sell up which results in a reduction of available housing.

How is this helpful?

stopdrawingonyourhands Thu 16-Feb-17 21:11:08

There needs to be something.
We have had to move through sale of property or landlord going bust on several occasions. Our dc have lived in five houses by the time they were five and another three in-between then and now.

Yes to what the email said about being paranoid about the carpets and walls.

That said I'm not sure how the five year thing would work. We need more social housing more than anything.

ArchNotImpudent Thu 16-Feb-17 21:18:13

We have had to move through sale of property or landlord going bust on several occasions

That must have been very tough for you, and especially your DC. It's not clear, though, that Shelter's campaign would actually have stopped that from happening. It says landlords would still be able to sell the property - it doesn't specify whether or not they would be obliged to sell it with a sitting tenant. The event of the landlord's going bust isn't mentioned at all.

The proposal needs some gaps filling in before it can be realistically considered.

scaryteacher Thu 16-Feb-17 22:11:53

KP We are only here for six years, and due to the weird rules in Belgium and the stratospheric buying costs, it is easier to rent for us. It is about 20% of the purchase price for buying and selling, and 21% VAT if you buy a new build. The market here is opaque, and if you sell within 5 years, you are taxed on any profits. Renting avoids the hassle, and means if Dh's contract is cut short, or we have to go home for other reasons, we can leave without being tied to a property here.

specialsubject Thu 16-Feb-17 22:23:24

The email about 'Rachel' and her carpets - if her kid treads playdough thoroughly into it, that is damage. The deposit deduction will be value of carpet adjusted for its remaining lifetime and the damaged area.

Unless the carpet was brand new at the start, and totally unusable within a couple of years, the sum involved would be small. I know, and the substance involved was not playdough.

There is no need for paranoia. A cheap rug or using playdough elsewhere would be even easier.

'Rachel' also lives in a draughty chilly dump, it seems. Perhaps that is what shelter should be bending their energies towards sorting. And the madness that means that someone else will apparently pay 40% more for this tatty chilly dump.

Improve standards. Fine with me, my rental is warm, clean, immaculate (again...). As all properties should be , including the housing association shockers that.come up on here.

HelenaDove Thu 16-Feb-17 22:34:55

YY special subject. There is a strange reluctance from Shelter to mention HAs in any of their campaigns.

HelenaDove Thu 16-Feb-17 22:38:47

www.thisismoney.co.uk/money/mortgageshome/article-3890656/Five-year-old-HOSPITALISED-Circle-Housing-fails-make-home-warm-dry.html

Valentine2 Thu 16-Feb-17 22:42:08

Thanks Mumsnet. It sounds like a very good cause. Thanks for the link to their cause.

HelenaDove Thu 16-Feb-17 22:47:21

www.theguardian.com/society/2017/feb/06/life-flagship-housing-estate-orchard-village-east-london

SuperSheepdog Thu 16-Feb-17 23:26:16

Longer tenancies are a good idea for many tenants and landlords, however some tenants and landlords want a shorter contract.

Something needs to be done about councils encouraging tenants in private rentals not to vacate if they can't afford the rent. Forcing landlords to go through the stress and cost of eviction is totally unfair. It is also unfair on the tenant who may feel very stressed and guilty about the situation.

Theblueplanet Fri 17-Feb-17 08:46:53

As others have mentioned, there are lots of renters who don't want a longer rental contract - my DD has just rented a flat with her friend, they don't want to be tied in for years, they want to be able to move on if their circumstances change.

It feels as if more HA properties are needed for people who want more security of tenure. And, as as SuperSheepdog says, LA's need to stop thinking of tenants who comply with notice to leave from the landlord as 'voluntarily homeless'. It just puts both the landlord and tenant in a horribly stressful situation.

Shelter have not given enough information about this for anyone to take it seriously, it seems very poorly thought through on their part.

stopdrawingonyourhands Fri 17-Feb-17 09:18:03

'LA's need to stop thinking of tenants who comply with notice to leave from the landlord as 'voluntarily homeless'. It just puts both the landlord and tenant in a horribly stressful situation.'

Yes to this. It is bloody horrible to stay in situ with tiny children, stressed because of a pissed off landlord who rightly wants their property back and waiting for the baliffs to come and throw you out. Even more stressful when you don't know what day and time, have no car and no where to store belongings in-between.

THAT needs addressing.

PencilsInSpace Fri 17-Feb-17 09:18:41

I'm a bit confused by this. AFAIK there is nothing stopping LL offering longer fixed term AST already. It's not clear what Shelter are actually asking for in terms of changes in the law.

I think we need much more proper social housing, also HB needs to be made much more reliable so more LL are willing to take tenants on benefits.

PencilsInSpace Fri 17-Feb-17 09:19:38

And yy to the 'voluntarily homeless' thing as well.

NotCitrus Fri 17-Feb-17 09:34:40

Agreed it's not clear what the proposal is, which makes it pointless. Landlords can and do already offer longer leases, usually a year after the initial 6 months, but current problems are mainly down to not enough homes to rent, insufficient enforcement of living standards, and the LAs refusing to assist until eviction (which is just delaying the same people - it surely can't reduce the numbers LAs have to deal with that much?)

specialsubject Fri 17-Feb-17 09:54:05

Regarding the awful situation of having to wait for eviction to get any council help - councils were told not to do this but ignored it. However a bill is now going through which will enforce that a section 21 means eventual eviction and so the councils must not treat those who leave at the end of the notice as voluntarily homeless.

Doesn't produce any more housing but saves the tenant a grand or so in legals.

Doubt we will hear from shelter on this but any comments from mnhq or supporting what seems to be a campaign addressing the wrong issues?

Dragongirl10 Fri 17-Feb-17 10:27:13

Shelter are aiming in the wrong direction here, as a LL in the SE l rarely have tenants who want longer than a 12 month contract as they wish for flexibility, job wise. All want a 6 month break clause in case of a job change.

Majority are in the 25-35 age bracket and don't want to be tied down to a permanent home.
On many occasions l have asked if they are planning/saving to buy and at least 75% say no, not because they cannot save but because they like the flexibility of renting and lack of responsibility.

On only 2 occasions have l had longer term tenants, slightly older couples on good incomes who automatically renew every year, (my rent increase for these tenants is 2% per annum, to cover increased insurance and maintenance costs) Again they could easily afford to buy but choose not to. As l speak regularly to my tenants, l know if they want to stay long term and plan to renew the AST as an ongoning matter of course.

l could not continue as a LL if l was forced to give long tenancies as already the tenant holds most of the rights.
If they are a bad tenant, it is already difficult and expensive to evict someone not paying their rent, or trashing a property.

I have had tenants cause me close to 7K of repairs and an empty flat for 2 months whilst it was repaired, if l couldn't get tenants like this to leave under this new longer tenancy then that would make my position untenable and l would sell.

Sadly all the increased checks and regulations recently introduced has done little to tackle bad LL's, and added lots of costs to LL's which are passed on in part to tenants so we are all worse off.
l have had wired smoke detectors for many years along with electrical checks, new well maintained boilers, etc. The bad LL will just still avoid maintaining their properties.

l understand families renting will want more security but most LL also want longer term tenants, l think communication is the key not more regulation.

If a family wants a longer contract they should discuss with the LL directly if possible, rather than the agent and get an idea if the property is a long term investment or a short term one.

I always meet my tenants and have a frank discussion, if thay want a long term tenancy l suggest a year AST renewable if they pay rent on time and keep it in reasonable order.
Good tenants have always been happy with this, as they know they will adhere to the agreement and therefore be able to renew.

Sadly there are as many bad tenants as bad LL's.

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