Plans to remove fixed term tenancies and prevent rent payments to be taken in advance of tenancies must be fully assessed ahead of the Renters’ Rights Bill becoming law, Propertymark has warned.
The organisation said a fixed term tenancy allows security of tenure for the tenant and a guarantee of rent payments for the landlord, and that they are requested by tenants, including nurses working in hospitals for set periods, or those from overseas, and families who want to stay in an area because their children are at a school.
Ahead of the introduction of the Renter’s Rights Bill, Propertymark warned that the complete removal from tenancies of an initial fixed term will cause every tenancy to effectively become a short-term let which, with limited supply, driving up rents for individuals, couples and families looking for a long-term home.
With no security of a rental term for a landlord beyond the two months’ notice period and no long-term guarantee of rent, Propertymark said it would expect to see a significant number of landlords attracted to higher rents in the short letting market, which also offers them the advantage of being unregulated.
In addition, removing fixed-term tenancies could impact the student market.
The proposed Ground 4A, as currently drafted, refers to houses in multiple occupation (HMOs) which, by definition, is three or more sharers.
With rent instalments being limited to one month’s rent, removing the possibility of paying rent in advance, this will change the student sector, where tenants typically pay rent from Student Maintenance Loans termly, as well impacting those on fixed incomes.
Timothy Douglas, head of policy and campaigns at Propertymark, said: “Property agents recognise that the UK Government wants to increase protections and security for tenants, but they must recognise the unintended consequences of the proposals in the Renters’ Rights Bill and not reduce choice and flexibility for tenants.
“To support renters, we want to see fixed-term tenancies retained as an option and request that an impact assessment is done on the UK Government’s plans to remove fixed term tenancies and shared publicly with the sector.
“The UK Government must enact the registration of short-term rental property requirements as passed in the Levelling-up and Regeneration Act 2023 alongside these reforms to level the playing field for landlords and the long-term rental market.
“To support students, the UK Government must extend Ground 4A to one or more student sharers, move Student Maintenance Loans to monthly instalments and/or, allow rents in advance for student renters and others to keep flexibility and access to housing.”
