Labour party announced on the 1st of May 2014 some of the most radical changes to the Private Rental Sector seen in decades, if there party wins the General Elections in 2015.
The proposed policy has three main parts to it:
There will be three-year tenancy agreements beginning with a six-month probationary period allowing landlords to evict a tenant if they are in breach of their contract. This would then be followed by a two-and-a half-year term in which tenants would be able, as they are now, to terminate contracts after the first six months with one month's notice.
There will be a ban on what Miliband will today call "excessive rental increases". Labour says it will be guided by the Royal Institute of Chartered Surveyors, which is examining options for a new rent benchmark. This could be linked to average rent rises or inflation or a combination of the two.
Labour will ban letting agents from charging tenants fees for low level services, such as simply signing a tenancy agreement.
Point one has had a positive response from the Landlords we have discussed this with. As it can be an expensive process when there is change in tenants, leaving Landlords with potential void periods, cleaning costs, maintenance costs etc. Landlords would rather have long term tenants and some even mentioned they would invest more into their properties if they knew they had longer term tenancies in place.
Rent increases in the Fylde Coast over the last 5 years haven’t been dramatic with many rents even staying at the same level over this period. Some Landlords pointing out that the rents they have been achieving for properties have actually even fallen! But if interest rates are to rise, surely Landlords will have no option but to increase rents?
By reducing the fees that can be collected from tenants this will simply increase the cost for Landlords.
Many see this as an attempt from the Labour party to win over the vote of the growing ‘Generation Rent’ population. As a Landlord what are your thoughts on the proposed reforms?
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