Labour have announced that they are going to introduce caps on  rent increases and introduce longer term tenancies.  They say this will provide tenants with stability.

But how will this affect you as a landlord?   

Rent Increases -  rent will be based on market value and reviews of rent could only be carried out once a year.  Rents will not be allowed to increse any higher than a statutory limit.  

Length of Tenancies - Labour propose to introduce three year tenancies with a 6 month probation period, followed by an automatic 2.5 year extension.  Tenants will be able to give one month's notice after 6 months, landlords however will  have to give 2 months notice and have good reasons for terminating the tenancy.  The examples given of good reasons are rent arrears and anti-social behaviour.   I can see that this will cause all sorts of difficulties for landlords in gaining possession of the property - presumably you will have to wait until there are significant rent arrears or anti-social behaviour before issuing the 2 months notice, and then following that will have to go through the court process, thus extending the period for possession considerably.

It is very likely this wil put landlords off in either investing in the market or expanding their portfolio.  There is also the question as to whether mortgage companies would allow a mortgage on a 3 year tenancy.

If you do require any advice on tenancies please do not hesitate to either telephone me on 01623 448331 or email me at rbrough@fidler.co.uk

Rebecca Brough

Partner, Fidler & Pepper Solicitors

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