Won't be in our property for 6 months - what are our options now?

mashmash90

My partner and I are planning on going abroad for 6 months or so and have a 3 bed flat (on a mortgage so we can't just leave in unoccupied). We were initially planning to rent it out furnished at a reasonable rate on a 6-8 month contract (we live very close to London so there is high demand) and come back to live there on our return. Reading about the new laws around Renters Rights bill, we are now concerned this won't be possible as there is going to be a 12 month minimum.

Are there any other options we have? I looked into:
-Short term holiday let - seems to be limited to 3 months only
-Getting a lodger - but that would mean we are still liable for the full council tax, bills and the cost we can reasonably charge for the room is not going to even cover 40% of our mortgage

I'm curious what will happen now to people who do need to be in London for a shorter term (e.g on a fixed term contract, secondment, international students, people who temporary accomodation for whatever reason). What are the options available to landlords and tenants needing shorter term lets? 

user1977

When are you planning to do this? The new Bill isn't going to be in force any time soon. And it won't prevent tenants from renting for short periods if they want, the point is that landlords won't be entitled to kick them out (other than whatever the exceptions are, and obviously things like student accommodation will be treated differently).

FlorayG

If the tenant needs a short term let it's easier for them because they will only have to give 2 months notice and presumably they will know when they move in how long they want to be there
More difficult for landlords because you will be able to give the two months notice but may have to go to court to enforce it if the tenant doesn't want to move out
There's no '12 month minimum' all AST will become rolling monthly contracts from the start.
A lodger has to share facilities with the Landlord. If you're not living there, this won't apply

Mr.Generous

No suitable options, under the new law there is no minimum contract as the tenant can give a months notice on day 1 if they want, but worse there will be no end date to tenancy's - if the tenant decides to stay on you will have to go to court to get them out. This has always been the case, but you could have served a S21 notice previously and had the ball rolling early. Letting for a short period will be an issue with agent fees, property management and compliance costs. You need an electrical and wiring check, a detailed inventory, a gas check and a deposit protection in place.

My worry would be a tenant refusing to leave. Court backlog for evictions are long, a quick google reveals ...

Some parts of the country, particularly London, often experience delays of a year or more in some cases before an eviction takes place. In many instances, this has been the outcome even once a Possession Order has been granted

FlorayG

Mr.Generous said:

No suitable options, under the new law there is no minimum contract as the tenant can give a months notice on day 1 if they want, but worse there will be no end date to tenancy's - if the tenant decides to stay on you will have to go to court to get them out. This has always been the case, but you could have served a S21 notice previously and had the ball rolling early. 

When the new bill becomes law the notice period will be two months.
OP can issue a Section 8, mandatory possession as they intend to live there themselves and have nowhere else to live but yes, it can take months to get through court

Albermarle

My partner and I are planning on going abroad for 6 months or so and have a 3 bed flat (on a mortgage so we can't just leave in unoccupied). 

Do you mean you can not leave it unoccupied because you can not afford the mortgage otherwise? 

Also you will have to talk to your home insurers, they charge more for unoccupied properties.

mashmash90

Albermarle said:

My partner and I are planning on going abroad for 6 months or so and have a 3 bed flat (on a mortgage so we can't just leave in unoccupied). 

Do you mean you can not leave it unoccupied because you can not afford the mortgage otherwise? 

Also you will have to talk to your home insurers, they charge more for unoccupied properties.

Yes we can't leave it unoccupied as we need to have the mortgage costs at least partially covered

FlorayG

mashmash90 said:

Albermarle said:

My partner and I are planning on going abroad for 6 months or so and have a 3 bed flat (on a mortgage so we can't just leave in unoccupied). 

Do you mean you can not leave it unoccupied because you can not afford the mortgage otherwise? 

Also you will have to talk to your home insurers, they charge more for unoccupied properties.

Yes we can't leave it unoccupied as we need to have the mortgage costs at least partially covered

Then you're stuck between a rock and a hard place. You can try to get a tenant who is on a 6 month contract for example, but there's no saying that the company employing them won't extend this or give them a permanent job. Remember if you do let it that you will have to pay agency fees, safety check fees and TAX on the rental income; plus you need your lender's permission to rent it out,

saajan_12

6 months is possibly the point where its too short to really work out. 
1. Eviction - if you return after 6 months and the tenant wants to stay longer, it'll be likely another 6 months from when you serve the notice even with the current rules to get a  court possession order. Post Renters Rights Bill, this would likely become 12-18 months (minimum 12 months tenancy if you want to evict on the basis of the LL moving in, then 4 months notice, then court). 

2. You'd have to clear your belongings if you want to let the whole property, meaning 2x moving costs and storage. If instead you leave your stuff in a room, then you're not letting the whole property, which will have impacts on the council tax liability. 

3. Repairs & refurb when they do leave, as it'll never be looked after exactly how you like. 

4. EPC, GSC and EICR reports, licence if needed - which are cost effective if you get years of rent from it, but here you're only getting 6 months. 

mashmash90

Thank you to everyone who has responded. I appreciate the extra advice regarding things we might need to consider like EPC, GSC and EICR (we actually already sorted these last month). We were planning to advertise through OpenRent instead of using an agent. I am also aware that our mortgage provider needs to provide permission which I think won't be an issue and we are aware they will add a small amount to the interest as a result. We are not trying to cover the costs of the mortgage, merely offset some losses and make sure the property is not left unoccupied.

My biggest concern was with the new regulations that we can't get back to living in our home within 12-18 months. Our plans aren't set in stone so I think we can get away with being away longer or staying with family for a couple of months. I think our best bet is to target people who we know are definitely students and will need to leave and will probably just reduce the price a bit. I know that is still a risk but with students at least I think it's less likely they'll want to stay longer term.

Does anyone know when the Renters rights bill will become active? If we were to rent out from Sept 25- Apr 26 for example, will it likely come to effect that quickly?

user1977

mashmash90 said:

Does anyone know when the Renters rights bill will become active? If we were to rent out from Sept 25- Apr 26 for example, will it likely come to effect that quickly?

No, it's not even passed yet and there will no doubt be time given to let everyone get up to speed.