The Dame always listens to property men with a finger on the rental pulse. Patrick Bullick of Stanley Property London is one such. His latest bulletin details how damaging the Renters Act is for both landlord and prospective tenants. Lordly Gove came up with this nonsensical legislation, and it was gleefully taken up by Labour. Lordly G is now so diminished that he has to front up ads for the Spectator on You Tube…
Over to you, PB…..
Tenancy Chains and Voids
The Renters ‘Wrongs’ Act (RWA) is having a material effect on the letting market. Both landlords and tenants are suffering from this ill-conceived legislation.
Many of the consequences were pretty obvious, except perhaps to those naïve left-wing lobbying groups and the dullards in Government who drove it through.
Some pitfalls are more nuanced and, only now, raising their ugly heads.
The RWA has moved us into a world of tenancy chains, directly equivalent to a sales transaction chain and just as vulnerable to being broken, allowing no-one to proceed.
It is definitely happening in London. Feedback from readers in the Shires is welcome.
There are many contributory factors causing these tenancy chains.
The devil is in the detail.
A tenant now has to give at least two months’ notice to end a tenancy, where it was commonly one month until the Act. The fear of duplication of rent means it is a leap of faith to give notice when they have not yet found a new place.
Landlords exiting the rental market because of the RWA has caused shortages and rent rises which makes it harder for tenants to find a good new home.
If the tenant does find a property, the landlord cannot sign up to that new agreement until the old tenant has actually left.
If a landlord were to suffer a ‘duplication of tenant’, that landlord would be responsible for the cost of housing the new tenant until the old one had vacated or another place had been found.
Expensive stuff, especially in London.
We have already experienced tenants giving notice to leave and then not actually going because their onward move has fallen through as something collapsed down the chain.
So, another consequence of the Renter’s ‘Wrongs’ Act is both landlord and tenant are bound into a messy and expensive process, with no certainty for either.
The lack of fluidity for a tenant, restricts their ability to move when their needs change.
Terrible for the tenants and the economy.
Whilst we wait years for the Government to recognise and respond to the debacle they have created, the market must find solutions.
Landlords releasing a tenant from their obligation to give two long months’ notice could mean they have a void period between tenancies.
However, as it is not possible to sign a new agreement until they are gone anyway, it may be the most pragmatic way to deal with an uncomfortable situation.
Voids do cost money but the ability to ask, and probably get, a higher rent is an upside.
The key will be to find good new tenants quickly.
Or sell!
Finally, for goodness’ sakes use an experienced agent who knows what they are doing.
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