Ed Miliband proposes to put a stop to families being “ripped off” by private landlords by introducing three year tenancy agreements in the private sector. The proposal includes limiting the amount of rent increases and a ban for letting agents charging tenants fees.
The new three-year tenancy agreements would start with a six-month probationary period, at the end of which the landlord would be able to terminate the contract if the tenant was deemed to have failed the probation – for example, if there were rent arrears or there had been anti-social behaviour. This would then be followed by a two-and-a-half-year term during which tenants would be able, as they are now, to terminate the contract with one month’s notice.
Landlords would only be able to terminate contracts with two months’ notice (Section 21) if:
• The tenant was behind with their rent, was guilty of anti-social behaviour or breached their tenancy agreement
• The landlord wanted to sell the property, needed it for their own use, or required it for their family
• The landlord planned to refurbish or change the use of the property
“Landlords would not be able to terminate tenancies simply to put rents up,” says Labour. There are exceptions such as landlords with buy-to-let mortgages taken out prior to the legislation taking effect to continue using shorter agreements where the mortgage small print does not cater for longer tenancies.
There would also be provision for new tenants such as students or workers on temporary contracts to request shorter-term tenancies, subject to the landlord agreeing to this.
The legislation would place an upper ceiling on rent increases. Labour says this would be based on a benchmark such as average market rents. It may or may not also be linked to inflation.
We imagine Landlords with buy-to-let mortgages would argue that any limit should also take mortgage rates into account. What do you think about the proposed reforms?