What should tenants expect from the recent tenancy charter?
On 1 October last year, the Communities Secretary, Eric Pickles, announced a new government initiative to promote family-friendly long term tenancies. Pickles stated in the announcement that the coalition government aims to match the support shown to first time buyers in order to provide a boost for the rental market.
So what will this mean for landlords?
In terms of advantages, long-term tenancies will obviously lead to a distinct reduction in what Pickles describes as the ‘potential periods of vacancy’ between one tenancy and another. There will also be financial gain for landlords in the sense that the cost of finding new tenants will be reduced, as they will not be required – through the very nature of a long-term tenancy – to do so on a regular basis.
The new charter will also ensure that tenants will be encouraged to take greater care of the property on the basis that they will be living there for a longer period. The level of risk is also reduced by a probation period agreed upon the signing of the tenancy agreement, which is in fact a plus point for both parties, allowing them to assess whether the wish to continue on with the agreement.
In terms of disadvantages, the new tenancy charter could mean that many landlords could potentially find themselves in breach of their buy-to-let mortgage conditions, as they typically stipulate that tenancy agreements be valid for no longer than one year.
Landlord and property expert, Jonathan Green from Swift Capital Ltd offered support stating “Long term tenancies are good for families, but this will also benefit landlords by creating a tenant agreement which is legally binding by both parties, therefore less chance of the houses going empty and lost income”
How could it affect families (with & without children) and workers?
The new tenancy charter enables tenants to gain a greater level of stability for their families through longer tenancies. Such agreements can now be made on request, which will help tenants to avoid the hidden fees that have been so prevalent in the rental market, thereby demanding a fairer deal from both landlords and letting agents.
Families will also be able to gain increased security on the basis that they are made fully aware of the types of tenancy agreements that might be available to them. This is good news for families with children as it means that these children will not be forced to move schools due to moving house which is likely to make them feel more settled in the process.
The new charter will also lead to a reduction in fees due to the fact that landlords will have to pay agencies less frequently, because the contracts will not have to be continually renewed.
The charter comes into force without having an impact on the existing legal framework, meaning that tenants still have the same legal rights.
To Sum up then, all of this could prove to be a good deal for both tenants and landlords alike. Tenants will be able to settle in a property, making big financial and lifestyle decisions with a greater peace of mind and confidence. At the same time landlords are able to save money on agency fees and the possibility of lost rent whilst searching for new tenants as existing tenants will occupy the property for a longer period.