June update on the Private Rented Sector

Longer tenancies, the potential consequences for the industry of the Superstrike vs Rodrigues case, and of course Shelters launch of its campaign to ban agent fees to tenants.

Longer Tenancies

At the beginning of the month the London Assembly issued a report on the private rented sector “calling for the mayor to intervene in the capital’s private rented sector through “rent stabilisation” and encourage longer tenancies.”  Although the “rent stablisation” was seen by many as a redressing of rent control, what was welcomed was LettingFocus.com’s expert evidence in regards to the 12 month restriction on tenancy length imposed by most mortgage lenders along with some lenders’ rules against housing benefit.  This key recommendation has gone forward so that pressure will be put on lenders to stop these restrictions.  Some forward thinking lenders, Lloyds Banking Group and Nationwide, have stopped their restrictions and allowed landlords to let to people on housing benefit, and more recently Nationwide also announced that it will let landlords offer three-year contracts.  After all tenants want the security of longer-term tenancies and many private landlords would like to be able to offer them in the right circumstances.  Hopefully the proposal will be supported and all lenders can be made to eliminate these pointless restrictions.  However, not everyone agrees with providing longer tenancies, as argued by Mark from Property 118: Why on earth would The Mortgage Works “TMW” agree to three year AST’s?


Consequences of the Superstrike case for deposits

In other news this month there has been much chatter online in regards to the potential fallout from the ruling on the Superstrike vs Rodrigues case.   As yet no clear definite answer has been reached but the following articles give an insight into some of the potential consequences if any:

Shockwaves from new Court of Appeal ruling on tenancy deposits

Deposit schemes unite to take legal advice after Superstike case

National Landlord Association issues IMPORTANT message to landlords

Anxious wait for clarity goes on after Superstrike case 


Agents fees to tenants

Shelter launched its campaign this month “to get all letting agent fees charged to tenants banned throughout England. The lobbying organisation wants the practice outlawed by MPs, and in future only landlords charged.”  Opposition was voiced by Arla’s Ian Potter who stated that ‘ if all the costs were transferred to the landlord, it would simply put up rents for tenants.’  Caroline Kenny, executive at the UK Association of Letting Agents (UKALA), said that it was not “always appropriate” for only the landlord to be charged pre-tenancy costs, particularly when these costs are associated with proving the suitability of an applicant.  Pre-tenancy charges demonstrate the tenant’s commitment to the tenancy and protects the agent and landlord from applicants who provide false information.

Not long after this launch many agents have on Letting Agent Today been voicing their concern that Shelter is a charity and not a lobbying organisation, and as such should be probed by the Charity Commission.  As yet there has been no response from Shelter on this claim nor word of the Charity Commission investigating Shelter.  One agent did manage to get a reply from Shelter confirming that they are not only looking for transparency but for a change in the law to stop agent fees to tenants.

Only time will tell how these three areas of interest for landlords and agents will play out.

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