Renters' Rights Bill - Will it screw me over?

ConcernedRenter

Hi there,
I'm a student who will need to start looking for a room in London in a few months. Unfortunately, I don't have any recent landlord references, nor do I have anyone who I can really ask to act as a guarantor. I currently live off a mixture of my own savings (around £40k) and student loans. I always assumed I'd be able to offer rent in advance to persuade a landlord to consider me.

With the new Renters' Rights Bill, it looks like I'm going to be banned from offering any advance payments, doesn't this mean that I'll literally never be considered for a tenancy, given I'm competing with people who have references and a stable income?

I've looked at a few alternatives like offering proof of bank balance - apparently landlords don't care about that, as for all they know, it isn't my money or it'll be by the time next month's rent is due. I've looked at private guarantor schemes which charge 1 month's rent as a fee, but they require a co-signer who is equally liable for my payments. 

At least from my reading of the bill and my understanding of the market, I'm quite worried about my ability to find accommodation if/once this bill is passed. Does anyone with more knowledge than myself know... Am I correct to be concerned? 

FlorayG

Yes you are. I'm on a landlord forum and so many are saying they won't rent again to students with no income or foreigners who can just up and leave. It's only the guarantee of 6 months rent up front has kept them in that market until now. No landlord in their right mind would take that chance with no reasonable expectation the rent will be paid every month

SiliconChip

Assuming the Bill has actually passed before you start looking and landlords obey the law (which may depend on how closely it gets enforced) then I think landlords may need to revise the way they decide whether potential tenants can afford to rent by taking into account financial resources other than salary payments, otherwise they will be missing out on a large section of their customer base. But I'll be interested to see what the landlords on here think will happen.

Section62

SiliconChip said:

Assuming the Bill has actually passed before you start looking and landlords obey the law (which may depend on how closely it gets enforced) then I think landlords may need to revise the way they decide whether potential tenants can afford to rent by taking into account financial resources other than salary payments, otherwise they will be missing out on a large section of their customer base. But I'll be interested to see what the landlords on here think will happen.

I think compliance will depend more on the punishment if found out - if the 'fine' is something like 2x, 3x or 10x the amount of the advance payment then the risk probably won't be worth the reward, especially if the 'fine' is in the form of compensation paid to the victim.  If the tenant is sufficiently (financially) incentivised to report (/take action against) the landlord then the law would be self-enforcing.

FlorayG

No landlord is going to break any of the new law, the penalties for doing so are not just financial, you end up with a tenant you can't shift and YOU have to pay THEM. It's not worth the risk except by LL who are shysters themselves and their properties are dire ( sadly there are too many of those)

pinkshoes

ConcernedRenter said:

Hi there,
I'm a student who will need to start looking for a room in London in a few months. Unfortunately, I don't have any recent landlord references, nor do I have anyone who I can really ask to act as a guarantor. I currently live off a mixture of my own savings (around £40k) and student loans. I always assumed I'd be able to offer rent in advance to persuade a landlord to consider me.

With the new Renters' Rights Bill, it looks like I'm going to be banned from offering any advance payments, doesn't this mean that I'll literally never be considered for a tenancy, given I'm competing with people who have references and a stable income?

I've looked at a few alternatives like offering proof of bank balance - apparently landlords don't care about that, as for all they know, it isn't my money or it'll be by the time next month's rent is due. I've looked at private guarantor schemes which charge 1 month's rent as a fee, but they require a co-signer who is equally liable for my payments. 

At least from my reading of the bill and my understanding of the market, I'm quite worried about my ability to find accommodation if/once this bill is passed. Does anyone with more knowledge than myself know... Am I correct to be concerned? 

You could be a lodger instead? That way it's not an individual tenancy in an HMO, but instead paying for a room in someone's house under the rent a room scheme. Fewer rights in terms of notice period to move out, but doesn't have the same checks as a tenancy.

Or the Homeshare scheme where you live with someone elderly for free, in return do so many hours of chores per week for them?

FreeBear

pinkshoes said: Or the Homeshare scheme where you live with someone elderly for free, in return do so many hours of chores per week for them?

Where Homeshare schemes have popped up on my radar, the lodger gets charged a fee, as does the homeowner - Quite a good wheeze for the company running it. They get to charge both parties.

theartfullodger

FlorayG said:

No landlord is going to break any of the new law, ....

Evidence suggests otherwise.  Landlords appear in court in large numbers, but not always found guilty. For both long established laws and new ones.  

Best wishes to all.  (I'm also a landlord, hopefully law-abiding...)

Bigphil1474

Is there no student accommodation you could go into for a year then get a reference, or is this post student life? If it's post student for work, could your employer help?

spoovy

You certainly won't be "screwed over" by the proposed improvements.  Temporarily inconvenienced maybe, but in the long run (assuming you continue to rent for a while) you will probably appreciate being treated like a human being rather than a cash dispenser.

Grumpy_chap

pinkshoes said:

You could be a lodger instead? 

That would require the OP to actually be a lodger - i.e. resident live in landlord - and not simply a contractual arrangement over what would otherwise be AST.