Author: Lauren Burnett, Customer Success Team Lead, Goodlord
Lettings is an industry that’s used to change. There’s always new legislation coming into play, whether around property safety, tenant fees, or tenant rights. The next big change comes in the form of the Renters (Reform) Bill – and it comes at a time when stock levels in the private rented sector are already strained.
However, there are plenty of positives to take from the new rules, with much to help protect the landlord too through the course of these changes, whatever the final form they take after passing through Parliament. I speak to plenty of agents about their experiences, and I used to be an agent myself, so here’s how I’d suggest helping landlords understand what’s to come – with a free talk track to guide your conversations.
1. The changes to sections 21 and 8 aren’t as scary as they seem
Yes, section 21 is expected to be abolished. But section 8 will be strengthened alongside that. Make sure you ask why your landlords might want to gain vacant possession, so that you can reassure them that they’ll likely be able to do that.
For example, if your landlords want to move back into the property, sell it, or have their close family members move in – there will be section 8 grounds for all three.
For repeated rent arrears, that rule is being strengthened too, to cover three separate instances of at least two months of arrears over a three year period.
Plus, if you’re unlucky enough to have an anti-social tenant in your landlord’s property, the definition of what could be cause for eviction is also being expanded to cover any tenants “causing nuisance or annoyance to the landlord or anyone living in, visiting or in the locality of the property”.
That’s still a lot of scope to regain possession of their property when there’s a legitimate reason to do so.
2. Periodic tenancies can help give everyone more flexibility
When tenancies move to periodic, tenants will be able to give two months’ notice to move out, rather than the one month’s notice that’s currently in place – and that means a whole two months to find another tenant to replace them.
Goodlord’s Rental Index shows that void periods dropped to the shortest period since our records began in July, at only nine days on average across England.
With high demand from tenants right now, the chances of leaving your property empty for longer periods of time is slim.
If we take a look at our current tenancies, most tenants renew year after year and, according to various reports and current trends, the average tenancy length as it stands sits at over two years.
Moving can be time consuming, stressful, and costly for tenants too – although lettings platforms like Goodlord aim to help with that! Taking this and current stats into consideration, there’s no reason to assume tenancy lengths would drop drastically after the shift to Assured Shorthold Tenancies.
3. Market rates will dictate rent increases – and they’re currently higher than they’ve ever been
While renewal dates will be a thing of the past, the Renters (Reform) Bill still allows landlords and their agents to increase rent once a year.
Rents will also need to increase in line with market rates. Goodlord’s July Rental Index saw the highest average rental costs since we launched the Index in 2019, at £1,367 per property.
Of course, you’ll need to look at the rents in your area specifically, but they’re likely rising faster than previous years – good news for your landlords’ yields, particularly those that have managed to lock in low fixed-term interest rates on their mortgages.
4. The property portal will share valuable information to help landlords have more visibility on changes to come
The property portal will require landlords to add certain information about their property and the safety certificates it holds, to make sure that it’s all up to date and up to scratch.
This aims to help give tenants more visibility over the property that they’re looking to rent.
However, it also means that landlords will have better access to the right information, to stay on the right side of the law and avoid any fines.
We all know that there’s plenty of legislation to keep on top of, and this portal will be a way for the government to communicate that with landlords.
For landlords using an agent, when they see those updates on new requirements, this will simply emphasise the role that agents play in shouldering those burdens for their landlords, so it’s a win-win.
5. Allowing pets in lets will open up a wider pool of tenants – with protection factored in for landlords’ properties
Finally, relaxing the rules around allowing pets in lets will give landlords a bigger pool of tenants to choose from.
Landlords will be able to require their tenants to take out pet damage insurance, or tenants will be required to pay the premium on pet damage insurance the landlord takes out on their behalf.
That means that the property will be protected over and above the confines of the security deposit for any pet damage.
Tenants with pets are likely to be couples or families. In my experience, this demographic tends to look after properties better than most as they’re normally an older demographic that would tend to avoid parties in the property!
They’d also generally be looking for a long-term home, meaning regular rental income for a longer period of time.
Download a free talk track to help your team reassure your landlords.
TDS API and Goodlord have integrated, saving agents up to 10 minutes per tenancy registration. You can read more about this integration with Goodlord here.
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The views expressed in this content are solely those of the author alone and do not necessarily represent the views of TDS, its officers, or employees.
Originally published on Goodlord
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