Renting in London- fixed term for three years?!

[hippityhop2025]

Hi, DD has 3 years left in her undergraduate course at Imperial and will have to move to private rental accommodation starting September. She is looking for a house to share with 3 others in the same course. Apparently it's quite competitive/stressful to secure a suitable, affordable place. They've now found a lovely place around 15 minutes cycling distance away for a good price but the agency is asking them to commit to a three year fixed term contract with an expensive break clause if they want to leave in the first two years. After this, they can exit the contract with 2 months notice.

Is it usual to have student-lets on 3 year fixed term contracts? Or is it a red flag? I'm hoping the friends she is moving in with are responsible- she met them on the course. If one of the friends fall out or move, the full rent would have to be borne by the remaining tenants - equally I assume- but this arrangement is orally agreed. They will have to find a replacement.

I am happy to act as guarantor for 1/4 share of the rent but the agency referencing form states the full rent. It should explicitly mention that I'm responsible for 1/4 right? Should I call the agent directly and ask? They've said so to DD but surely the guarantor form should be explicit?

Totally new to student renting so will appreciate any advise.

@hippityhop2025 Not usual for students but it’s the private rental market - not just aimed at students. Could working professionals or even a family take it? The renters in London are often desperate for longer rental periods so they have security and are able to settle. This is a house and I’m assuming non students would like this contract. I think they just have to decide if it’s worth it.

You could not pay me to cycle in London! Thats the big risk they are taking. 15 mins on the tube would be much safer.

@hippityhop2025

The LL I presume wants a joint liability? That means as guarantor you are liable for any defaulter on the rent. Ideally you and the other parents should have an agreement from the outset to cover this. I expect it is a LL’s market right now so You (or your DD) should take legal advice regarding the wording of your guarantor’s liability as this is money well spent. As guarantor both you and your DD should both have the details of the tenancy deposit scheme. The deposit cannot be any more than one month’s rent. If an agency is involved, these fees are also limited by law. You should walk away from any LL claiming ‘no deposit is required’ or one who fails to produce the requisite safety certs (or provides ones which cannot be checked).

That said, regarding the term, The new renters rights bill will automatically supersede any existing tenancies and provide for a 2 month notice period when passed, regardless of what has been signed. The LL should advise you of this if they are reputable, but it is good for you to know. As an example, when renewing my tenants agreements this year, I have informed them of their new likely rights in advance. Shelter has good advice for prospective student renters too.

See this link here:

https://www.gov.uk/government/publications/guide-to-the-renters-rights-bill/guide-to-the-renters-rights-bill

My son (kings London) got a two year contract on his flat (three year course). So multiple years is a thing.

suitable flats are hard to find - it is London.

I’m not certain long term rents are what all landlords want. They do want their properties filled with no gaps but renters are asking for longer contract periods repeatedly. It’s hardly fair to say it’s just a LL benefit. Many renters would say they wanted it too. It just might not suit students.

Foxtons or similar?

As a landlord I am regularly told that the prospective tenants want three years. It makes no sense and I always refuse. Three years means that the landlord is committed to paying three years commission (Foxtons = 11% of rent + VAT for let only, something like 17% for management.) So if the tenants need to move early I have to insist that they bear some of the cost. When I meet the tenants it inevitably turns out that this was something pushed by the negotiator, not them.

No one is sure the precise form the new Rental Reform Act will take other than fixed term tenancies will be a thing of the past. At the moment big agencies are really pushing the three year thing. My assumption had been that once the Act was in place any fixed term contracts would automatically be converted to new tenancy terms, but perhaps not. I just had three years pushed at me as something a couple of Investment Banker tenants were demanding as a condition of renewal. They are young, very multi lingual and not originally from the UK. It is very very likely that one or both will be transferred elsewhere within the next couple of years. As I guessed, they preferred flexibility. The agency had been telling fibs to all of us.

She could agree but ask for a break clause after 12 months. It's what agencies offer me when I refuse to consider 3 years. (Is there somewhere in Imperial which offers advice on tenancy agreements? Some of the negotiators are very dependent on commission and all sorts of weird things can creep in. Otherwise, read the lease carefully.)

(And being cheeky, if anyone knows of three responsible graduates, starting jobs in London and looking for a house share, do PM. The market is wild, and I can't face the pushiness of a big agency or the doziness of a small one, or the level of interest likely to come via OpenRent.)

yes, Foxton's. The pressure to take on the three year fixed term is high and I hope DC and friends have not already paid the deposit. DC is very tidy, clean and responsible. I think the friends are too....cheeky request noted :)

She absolutely needs to demand a break clause after 12 months. I can understand why in this market she feels pressured.

The Foxtons CE issued some sort of statement last week aimed at market investors and analysts, and reading as if it were written using AI. It included claims that they were going to squeeze more profitability out of existing business by, essentially, selling more product to people like me. I read it just after a bizarre conversation with one of their managers. I said that given the changes in law and the fact that the previous tenants, though keeping the house in good condition, have been difficult to work with, I wanted to meet any new tenants before signing the contract. I didn't apparently. All I needed to do was buy an additional insurance/indemnity type product from Foxtons. The hard sell was such that I very nearly put the phone down on them.

Hence the cheeky request!

I understand completely and would insist on meeting the tenants myself. I also heard that all agents DC and friends had experience with, advertise the property for a relatively reasonable price but create a bidding war among prospective viewers, with the winner being the one that accepts/places the most lucrative promise for the LL/agent: Lucrative in terms of starting tenancy immediately, paying a deposit before viewing property, paying a higher rent, signing a longer fixed term contract, etc. I have half a mind to deal with the estate agents myself but resist as DC will be mortified and they need to learn anyway.

Not surprising.

That said she really does not want to be tied into three years without a break. The landlord may be willing to release them, but Foxtons are likely to demand their full three year commission from the landlord. (They should not if the landlord finds a tenant to replace them, but it means that the landlord needs to use Foxtons again and it is difficult for the outgoing tenants to know what has happened.) The landlord is then very likely to ask tenants to pay a portion of this future commission in exchange for being released from the contract.

There could be something wrong with the flat, like a problem neighbour or damp that they don't see when viewing.

DD needed to find somewhere in Bristol post lockdown. Most of her friends had stayed in Bristol and were continuing their existing flatshares, and she had finals at the end of the year, so the deal was that she could pay more and live on her own for her fourth year (medic) and then live in free placement accommodation in her fifth.

She did not last long looking on her own. Properties on Rightmove the night before were gone by 9.30am the next day, and so she asked my help. We put together a "package". Parental guarantee, rent in advance, move in as soon as a property was available, and I spoke to the agents promising that I would make absolutely sure she understood her obligations as a tenant. As soon as we found a couple of places to view we drove straight down and put in a full price offer before leaving the flat. 13 month contract as she took it early (I had a sneaky few days in Bristol when delivering some furniture, which were lovely.) No way would we have agreed to more.

My concerns would be what if there was a falling out in the friendship group?
What if she fails a year/decides she doesn't want to continue the course?

Also is she only liable for her portion of the rent?

As a lecturer I see situations like the above a lot! And it's bad enough when someone is stuck for the remainder of the academic year.

Foxtons are awful for pushing (and overstepping) the boundaries of the law with shady practices. I've read more case law where the OFT (now CMA) have dragged them to court than I care to remember! Idk why anyone would touch them!

Sadly many of the alternatives are dozy/incompetent. Foxtons have good access to the corporate market, which is important in Central London. I have had some super tenants in the past through them, but they need watching like a hawk. They act in their own interests, not in the interest of their client, the landlord. They seem to have got a lot more aggressive in the past few months. Too aggressive. I assume they want to tie things up long term before new legislation comes in.

I am likely to use OpenRent but my heart sinks at the though of having to sift loads of applicants, many of whom will not be suitable.

The property is a Victorian terrace, so EPC D. which means that post 2028 I can't let it out without first having carried out major refurbishment. And under the new legislation I probably won't be able to ask tenants to leave to carry out this refurbishment, but instead would have to provide them with alternative accommodation. Unless the Government blinks first, my only option will be to sell. Wandsworth have also just announced that they are bringing in selective licensing from 1 August. I have all the EiCrs, Gas Safe, heat CO2 and smoke alarms, etc, so it looks like it is just an extra tax. I ended up emailing them as I could not find application details on their website. Their reply....details won't be up until 1 July.

Tough for me but even tougher for your daughter and her friends. Firms like Foxtons are taking advantage.

We have already sold our rental properties. It’s not worth the hassle these days. For students and others who want shorter terms and not long term rentals it’s going to be rough.

It’s always been difficult in London. DD had problems finding anywhere in 2016! Huge demand and everything going to the first client to look at it. However there’s been such a continual media, and Labour Party, push against greedy landlords, the decent small LL is pulling out which is going to backfire with fewer rental properties or tenancy periods some don’t want. Shorter ones lead to evictions so greedy landlords can make more money according to Labour. Obviously there’s a lack of understanding about who rents but don’t expect companies like Foxtons to act in your best interests. There are other better companies but the Government is making the situation more difficult.

Can the accommodation office at Imperial help?

Has she looked at co living type places. https://gravityco.com/locations/

Thanks everyone. DC and friends have gone ahead with renting the property for 3 years. The stress of not having a place secured before dispersing for summer was daunting. Hope it will all work out!