So with old Lizzie Truss going back and forth on the renters reform, and, well then just being binned off herself anyway, it might be wise to look at one issue that can arise with the student market if they decide to do away with tenancies.
Most student tenancies are 12 months, and are booked in way in advance. Its just how the market works, and its worked well for a long time like this. Lets take a six bedroom student house in Brighton as an example here. It will take around £3000 a month in rent. If the tenants decide leave after their last exam in perhaps May, they can simply hand in their notice in March and leave penalty free. Well, if you think that is a good idea on behalf of the tenants, then just think again. I say here, as I said when the tenants fee ban happened that it will still filter down to the tenants, it always does. In this example, the landlord will be down three months rent, that’s £9k. That’s a lot of money, and probably means that after mortgage payments, other sundries, repairs, agency fees etc it will barely break even over the year, not a great business is it. If this landlord had a small portfolio of ten houses, that person is down nearly 100k in the year. Its crazy to think this will not need to be safe guarded against. We will need to change all tenancies to 9 month tenancies, but to claim the same rent it will need to be 4k a month in rent, and if the tenant wants to stay extra time, it will need to be paid for pro rata perhaps, or maybe the landlord will offer the last three months for free, either way, it will need to be factored in.
A second issue that can arise, is with the no fault eviction, which basically means that if the tenancy has not been breached then the landlord cannot move the tenant on. In most student houses this will be fine as they simply do not want to stay past their term as they have a life to get on with, but lets say a house has confirmed in December that they will not be renewing) yes we need to know that early in the tenancy), and we go out and get new tenants all signed up and everything seems like its Hunky Dorey, but as the tenancy runs to an end, the current incumbents have now realized that they do actually want to stay. I would have two legally binding tenancies for the same property signed up – logistically it could become an actual nightmare!!! Perhaps our beloved leaders will need to think a little harder about the type of properties under contracts and have different rules for each. Eyes on the prize!