Another naive call for 5-year tenancies

westernpromise

http://www.telegraph.co.uk/property/renting/these-charts-show-just-how-tough-it-is-being-a-member-of-generat/

Shelter is campaigning for five-year tenancies to be the norm - much like in Europe.

Of course in Europe you can depreciate the property against tax and fully offset the mortgage interest against tax as well, which Shelter would presumably not be in favour of?

Any landlord with a mortgage would find its terms forbid tenancies as long as five years because if the borrower defaults the lender couldn't repossess and sell to get their money back. The merest whisper of such a move would result in instant notice being served to tenants.

Graham_Devon

westernpromise wrote: »

Any landlord with a mortgage would find its terms forbid tenancies as long as five years because if the borrower defaults the lender couldn't repossess and sell to get their money back. The merest whisper of such a move would result in instant notice being served to tenants.

I'm not sure it would be that difficult, if, as you say "Europe" already does it.

It's only difficult now because the lending risk is much higher than that in countries in Europe.

markharding557

The merest whisper of such a move would result in instant notice being served to tenants.

The above sums up what is wrong with tenancies today, no rights for the tenant, everything in favour of the Authur Daley types prevalent in the rental sector.

steampowered

Any landlord with a mortgage would find its terms forbid tenancies as long as five years because if the borrower defaults the lender couldn't repossess and sell to get their money back. The merest whisper of such a move would result in instant notice being served to tenants.

It is perfectly possible (and in fact reasonably common) to sell a property with tenants in situ.

daveyjp

Commercial and retail landlords go bust all the time. You don't see businesses being thrown out because the property has to be sold.

CLAPTON

steampowered wrote: »

It is perfectly possible (and in fact reasonably common) to sell a property with tenants in situ.

it very unlikely that potential owner occupiers either could or would buy it, so it's likely to go at a lower price than if it very offered with vacant possession.

steampowered

CLAPTON wrote: »

it very unlikely that potential owner occupiers either could or would buy it, so it's likely to go at a lower price than if it very offered with vacant possession.

Possibly, although I don't think the discount would be to big, as soon as you get below the property value for that area I'd think buy-to-let investors would snap it up.

When I was looking for a flat in London about a year ago quite a lot of flats were being sold with tenants in situ, although I take your point that it wasn't suitable for me as I was looking to live there.

westernpromise

They wouldn't be able to buy it if the tenants have the right to occupy it for five years. The sector would vanish overnight.

GreatApe

In my experience most tenants don't want long term tenancies. Only ~10% opt for >1 year terms the other 90% go for 6 or 12 month contracts. Often they stay for longer but don't commit for more than 6-12 months.

There are problems with rentals in the uk but tenancy length is not one of them, there are also problems with social rentals and owner homes. I think its quite unfair that private rentals are picked on. There are terrible private rentals there are terrible social rentals and there are terrible owner properties and in most cases the common theme is people who don't take any pride in their homes or are simply clueless in general household tasks like cleaning or opening windows. I recall watching a BBC piece on the bad state of private rentals and the reporter goes into a flat and opens the oven and squirms and makes a face 'this is terrible its like it hasn't been cleaned in months' like not cleaning the oven for months is the landlords fault/job.

LydiaJ

The pdf of a sample 5 year tenancy agreement on Shelter's website has a clause giving the tenant the right to terminate the tenancy with 2 months' notice any time after the first 10 months of the tenancy, so the tenant doesn't need to commit to a totally inflexible obligation for the whole 5 years.

The landlord can also terminate the tenancy with 2 months' notice, but only if you the tenants don't pay the rent etc, or if the landlord is selling the property, in which case s/he has to provide proof of exchange of contracts. This sounds in theory as though the landlord can sell to a prospective OO with the right to get rid of the tenant 2 months after exchange. In theory... but in practice if the tenants felt like it, they could probably scare off any prospective OO coming to view the place, and a buyer would be crazy to exchange contracts without any proof that the tenants would in fact leave when asked to do so.

westernpromise

a buyer would be crazy to exchange contracts without any proof that the tenants would in fact leave when asked to do so.

Well, no, it would be the seller who would be crazy to exchange in those circumstances. When you exchange you're required to to set a completion day and to give vacant possession on that day. A seller who fails to give vacant possession is in breach of contract.

As a landlord you have absolutely no idea whether the tenants will leave by that day. They will be advised by the council not to do so, for example.

As you can't serve notice until you exchange but you can't exchange until you have served and enforced notice, any such provision would make all rented property unsaleable.

I am guessing the people who come out with this guff for Shelter are 25 year old know-nothings?