Regulations, government interference: Do rents in the UK have to be controlled?

[Dave2002]

In the last few years we have looked at several possibilities for renting - both renting out our own house and renting other property ourselves. In the UK at present the minimum possible seems to be a so-called "short term tenancy" - minimum period of 6 months. In my opinion this is totally inflexible, and there is a lot of bureaucratic form filling etc., though I do understand that there needs to be protection, for the tenant, and for the landlord.

I just remembered that when we bought our first house, for various reasons we negotiated a sale, but we actually did a private rental agreement for one month so as to make the sale work. This was perhaps because of timing for the mortgage, and the seller must have trusted us enough to be sure it would work. There may also have been some reason on his part. I know we all benefited, as we avoided estate agent's fees, as we had been introduced by a mutual friend.

Tha is now ancient history, but are such agreements legal in the UK? In one sense we had a contract, which we honoured, so there was no problem. My understanding of English Law is that any contract is an agreement between parties, and it is legal as long as it does not cause or support any illegal activity.

This is one area where I personally feel that some parts of the US are much more flexible. We had a 30 day rental agreement on an apartment in California - and 30 days meant exactly what it said. It was even possible to give the 30 days notice on the move in day, and the calculation of payments was done on a daily basis. However, that can only really work if there are sufficiently large organisations willing to offer that service - which is perhaps why it is not (seemingly) available in the UK.

I am sill now curious on reflection as to whether private agreements, such as the one we entered into over 30 years ago, would be legal in the UK.

[vinteuil]

... the question is - can you afford the fees likely to be charged for an Opinion regarding your query by the various lawyers who dwell in these parts?

I'm sure they wd be delighted to help. It may cost...

[subcontrabass]

The length of an assured shorthold tenancy seems to be variable, from one month upwards. See https://www.gov.uk/private-renting-t...ments/overview or http://www.pims.co.uk/short-term-tenancy-agreement

[ardcarp]

In the UK at present the minimum possible seems to be a so-called "short term tenancy" - minimum period of 6 months. In my opinion this is totally inflexible, and there is a lot of bureaucratic form filling etc., though I do understand that there needs to be protection, for the tenant, and for the landlord.

I don't know the law, but I cannot think for the life of me why a short let should not be possible. After all, one can rent a holiday house for 2 - 3 weeks.
The shorthold assured tenancy (6 months or a year) is, IMO, a very simple arrangement and you can buy the forms from e.g. W.H. Smith or even download them for free online. It protects (as you suggest) the tenant and landlord in equal measure. I think it was brought in partly as a reaction to Rachmanism (thus giving the tenant some security) and partly to encourage property owners to let houses (thus freeing up the housing stock) but without having to cede too many rights to the tenant. I disagree that it's overly bureacratic. The forms are easily filled in and simply signed by both parties in the presence of a witness. A ten minute job.

Good luck with the short rent/let!

[eighthobstruction]

I don't know the law, but I cannot think for the life of me why a short let should not be possible. After all, one can rent a holiday house for 2 - 3 weeks.
The shorthold assured tenancy (6 months or a year) is, IMO, a very simple arrangement and you can buy the forms from e.g. W.H. Smith or even download them for free online. It protects (as you suggest) the tenant and landlord in equal measure. I think it was brought in partly as a reaction to Rachmanism (thus giving the tenant some security) and partly to encourage property owners to let houses (thus freeing up the housing stock) but without having to cede too many rights to the tenant. I disagree that it's overly bureacratic. The forms are easily filled in and simply signed by both parties in the presence of a witness. A ten minute job.

Good luck with the short rent/let!

A ten minute job that ends up costing £150 +....because the majority of houses are rented by lettings agencies who perceive 'a nicer little [frequent] earner'....

[ardcarp]

No no no. Letting agents are a waste of space. Find a good DIY landlord.

[gradus]

No it depends on your letting agent just as it depends on your diy landlord, what you are letting and whether you have trouble-free tenants. A good letting agent is useful when a landlord first starts letting thereafter its more finely balanced imv.

[Dave2002]

I'll come back in a while with some more, but going even further back into my past I rented rooms from people pretty much on a week by week basis. Maybe many of us have done that, in days gone by - and who knows what agreements we had. Very possibly verbal agreements, shake hands, and threats to kill us if we fall more than 3 months behind with the rent In some of my own rental arrangements I became quite a part of the family for a while, taking the dog out, fixing cars, having my own car fixed, going to the pub, playing with the kids etc. Maybe the rules have all changed and tightened up now - probably need a CRB check to live in a house where there are kids, and everyone checking that all the parties are not on any of the registers of undesirable persons.

Times (may) have changed!

[Barbirollians]

A tenancy can be as short or as long as you like . In reality there are two main types of tenancy a fixed term tenancy and a periodic tenancy . A fixed term is a tenancy for say 6 or 12 months - whether you can bring that to an end within the term of the tenancy depends on whether there is a break clause in the lease .

A periodic tenancy is a weekly, monthly or sometime quarterly or yearly tenancy . These tenancies roll on from period to period until they are terminated . At common law that was by a notice to quit which generally had to be for one period of the tenancy expiring on the last day of a tenancy .

Residential tenancies , however, have been regulated for a considerable time . The first modern regulation came in 1915 after the Clydeside rent riots - both controlling rents and providing security of tenure . A tenant could not be evicted unless a ground for possession e.g rent arrears could be shown . In 1919 that was also made subject to the qualification that it had to be reasonable to make a possession order . Save for a brief period following the Rent Act 1957 ( which saw deregulation and the disastrous Rachman period of unlawful evictions) this situation prevailed throughout the 20th century until 1988 ( although there were particular changes concerning the nature of rent control ) . In 1988 the Housing Act introduced assured and assured shorthold tenancies . The former are tenancies with security of tenure but no real rent control . The assured short hold tenancy had to be for a fixed term of at least six months and required the service of a notice that it was to be such a tenancy , in a prescribed form , before the tenancy was entered into . If not then the tenancy was an assured tenancy .

Landlords frequently cocked this up and the Housing Act 1996 turned all new residential tenancies granted by anyone other than a local authority or one of another of a limited list of bodies into assured shorthold tenancies unless the landlord gave the tenant notice or the tenancy agreement provided that the tenancy was to be assured . Assured short hold tenancies can be brought to an end by two months notice called a Section 21 notice but the landlord must obtain a possession order if the tenant refuses to move out .

An assured shorthold tenancy may now be either for a fixed term or periodic however no S21 notice can be served to expire less than six months from the date of commencement of the tenancy . A notice also may not be served if a tenancy deposit has been paid and not protected under a regulated tenancy deposit scheme or if the property is a licensable House in multiple occupation but which does not have a licence .

Recent attempts supported by the Government even to prevent service of a S21 notice if a notice had been served under the Housing or Environmental Protection Acts to require repairs to the property or the abatement of a public nuisance were talked out by two Tory MPs .

As for the point about letting for a month before buying a house of course it is legal to do so . It is generally advised against for vendors for two reasons - if the sale falls through and the tenant refuses to leave you will have to bring proceedings to get them out which will not only be expensive and time consuming but also as it is very likely to be a breach of the terms of your mortgage deed . Most owner occupier mortgages have a complete prohibition on letting without consent of the lender .

[Dave2002]

As for the point about letting for a month before buying a house of course it is legal to do so . It is generally advised against for vendors for two reasons - if the sale falls through and the tenant refuses to leave you will have to bring proceedings to get them out which will not only be expensive and time consuming but also as it is very likely to be a breach of the terms of your mortgage deed . Most owner occupier mortgages have a complete prohibition on letting without consent of the lender .

All I can say about this is that that is what we did. I agree that it could have rendered the vendor vulnerable, and I don't remember what steps we took, if any, to help the vendor out. Perhaps it was just done on trust! I am now getting vague recollections about the circumstances, but will leave that for the moment. What was done was for the benefit of everyone involved I think, and was perhaps done to prevent the collapse of a chain.

Regarding living in the US and the 30 days rental - that seems to work in condominiums, and is very useful for people who want to move around - get jobs in different places, and then look for somewhere to live. I think it's a great shame that we don't have arrangements like that in the UK. There are enough difficulties with getting new jobs, and finding places to live without having to take on a rent for (effectively) a minimum of 6 months while something more suitable is found. The flexibility of being able to move into and also out of property in some parts of the USA seems very helpful to people to me, but of course many people in the UK think our way is the best, simply because they have no idea what happens in other parts of the world, and many people can't face change - particularly if it doesn't affect them anyway!

[ardcarp]

The discussion has centred rather around 'professional' people, coping people, get-up-and-go people, people very much in charge of their lives. Statistically, a high proportion of people seeking rented accommodation, particularly at the cheaper end of housing, are those finding employment difficult or impossible, e.g. single mums coping with small children unaided. The lack of council housing is a scandal, but filling the void are private landlords who, although seen as villains by some, are absolutely essential. Without them there would be a national housing crisis of unimaginable proportions. The assured shorthold tenancy is a vehicle which, in the UK, allows this sort of housing to be made available. Housing benefit is often paid directly to the landlord (discuss?). One wonders what could be provided in terms of social housing by the state in place of the truly astronomical cost of housing benefit, and the astronomical cost (laid at the door of local councils) of administering it.

[Dave2002]

The discussion has centred rather around 'professional' people, coping people, get-up-and-go people, people very much in charge of their lives. Statistically, a high proportion of people seeking rented accommodation, particularly at the cheaper end of housing, are those finding employment difficult or impossible, e.g. single mums coping with small children unaided. The lack of council housing is a scandal, but filling the void are private landlords who, although seen as villains by some, are absolutely essential. Without them there would be a national housing crisis of unimaginable proportions. The assured shorthold tenancy is a vehicle which, in the UK, allows this sort of housing to be made available. Housing benefit is often paid directly to the landlord (discuss?). One wonders what could be provided in terms of social housing by the state in place of the truly astronomical cost of housing benefit, and the astronomical cost (laid at the door of local councils) of administering it.

I agree with just about all you write here, but that doesn't mean that what I consider a more flexible approach for what you have called "get-up-and-go people" shouldn't also be available. You also mention a potential "national housing crisis of unimaginable proportions" - though you don't seem to mention that perhaps we are reaching that state already. There appears to be a shortage of housing over much of the UK, and particularly of houses which people can afford.

Regarding housing, "affordable housing" seems to be a technical term - rather than a universally meaningful one. It may be taken to mean housing which sells for about 80% of "market value" - and developers are often not at all keen to provide any dwellings which so-called "key workers" are able to afford. It's really a rather complex issue. Presumably housing need arises from a number of factors, including better health care, so that people live longer, and a significant birth rate, plus of course immigration. Localised housing need also arises from migration - for example people trying to move out from city centres to suburbs and rural areas. This is particularly acute around London.

It may be that the right to buy policies, which were heralded as bringing in benefits to many and giving them aspirations, have in fact now come back to bite us, as there is now an acute shortage of housing in sectors where previously there was not such a great problem.

[ahinton]

I agree with just about all you write here, but that doesn't mean that what I consider a more flexible approach for what you have called "get-up-and-go people" shouldn't also be available. You also mention a potential "national housing crisis of unimaginable proportions" - though you don't seem to mention that perhaps we are reaching that state already. There appears to be a shortage of housing over much of the UK, and particularly of houses which people can afford.

Regarding housing, "affordable housing" seems to be a technical term - rather than a universally meaningful one. It may be taken to mean housing which sells for about 80% of "market value" - and developers are often not at all keen to provide any dwellings which so-called "key workers" are able to afford. It's really a rather complex issue. Presumably housing need arises from a number of factors, including better health care, so that people live longer, and a significant birth rate, plus of course immigration. Localised housing need also arises from migration - for example people trying to move out from city centres to suburbs and rural areas. This is particularly acute around London.

It may be that the right to buy policies, which were heralded as bringing in benefits to many and giving them aspirations, have in fact now come back to bite us, as there is now an acute shortage of housing in sectors where previously there was not such a great problem.

The trouble with "affordable housing" - which, far frombeing a mere technical term is little more than a hand-waving one - is that, especially in more expensive housing areas, it's no longer "affordable" by the time it's constructed and put on the market. London weighting is all very well - and we know that many parts of the capital are the most expensive housing areas in the country and some people are paid more for working in and around London just because that's where they happen to work - but try places like Bath and other expensive areas where there's no such "weighting" but where parking in the city costs at least £15 per day and houses and apartments are vastly more expensive than in other areas and see how well the "affordable housing" thing doesn't work!

[ahinton]

Housing benefit is often paid directly to the landlord (discuss?)

I don't know how often this actually happens but, in the case of private landlords, it does not have to; housing benefit applications include a section where the applicant has the right to sign or decline to sign to give the local authority permission to notify the landlord that the tenant has applied for housing benefit; the relevant part of the form that deals with how such benefit is paid reads as follows:

"If you are a council tenant

Your council will pay any Housing Benefit you are awarded into your
rent account.

If you rent your home from a private landlord

Your council will usually pay your benefit to you. Your council can pay your
money
● straight into a bank or building society
● by cheque.
It is then your responsibility to pay your rent to your landlord.
In some cases, your council can pay your money direct to your landlord.
If you are unable to manage your rent payments, contact your council.
Your local council may ask you for more information.

If you rent your home from a housing association

You can choose how your council pays your benefit. Your council can pay
your money
● straight into a bank or building society
● by cheque, or
● direct to your landlord."

One might well wonder about the cost of provision of additional social housing might compare to that of housing benefit, but either ism as ytou sugfgest, "astronomical" for local authorities; in any case, some local authority tenants will be on housing benefit anyway and, in such cases, that local authority has to invest in purchasing and maintaining the property as well as shelling out housing benefit, which seems rather like the worst of both worlds.

[Dave2002]

The trouble with "affordable housing" - which, far frombeing a mere technical term is little more than a hand-waving one - is that, especially in more expensive housing areas, it's no longer "affordable" by the time it's constructed and put on the market. London weighting is all very well - and we know that many parts of the capital are the most expensive housing areas in the country and some people are paid more for working in and around London just because that's where they happen to work - but try places like Bath and other expensive areas where there's no such "weighting" but where parking in the city costs at least £15 per day and houses and apartments are vastly more expensive than in other areas and see how well the "affordable housing" thing doesn't work!

I only became aware of the "technical" use of the word "affordable" recently, after a housing survey in our area. I probably filled it in incorrectly through misunderstanding.

As we are now - as everyone else - getting older, there is a distinct possibility that we might wish to move into a bungalow, for mobilitiy reasons, before we encounter real problems. Consequently I filled in the survey form to indicate that. One part of the survey asked what were the barriers to movement, and as I remember I ticked "affordabililty" - which I now think was strictly the wrong answer - as far as planners and local government people are concerned.

If we wished to move in our area, the following facts are relevant:

1. There are very few bungalows.
2. Where there are bungalows, many owners convert them to chalet bungalows, or even conventional houses, which reduces the stock of one level housing. Indeed our current house is one such, having probably started off about 80 years ago as not much more than a shed, and is now considerably larger over 2 levels.
3. At a price we could afford, there would be considerable costs, due to the high prices requested, and also because of stamp duty, which would be a significant part of any transaction. To move in this area to a house which would satisfy our requirements - if such a house exists - would probably move us to the £1 million range, a very significant increase on our current property. Possibly, if we sunk all our funds into it we might just do it, but would then have little left to live on for the remainder of our lives. In that sense, for us, property is not "affordable". This, however, is not the right answer in the terms which planners etc. use. Clearly we are in the upper brackets regarding wealth.

For people who really are "key workers", and I've met one or two, they are often pretty much on an income close to the minimum wage, working quite long hours. Suppose they actually get slightly more - say £9 per hour, and do a 40 hour week - that's only £18000 per year before tax assuming 2000 working hours per year - and a 50 week working year - insignificant holiday! There is absolutely no chance that anyone earning that much (little) could get a mortgage to buy even a one bedroomed flat in this part of the SE.

Some of these people are women, presumably married to husbands who may have more income, but some are not. They are, hopefully, doing a good job - for example in some cases working in care homes, and providing much needed services. The high cost of housing is also driving some important workers away, and this includes teachers, and specialist staff. Maybe that's just an application of market forces, but almost an inevitable consequence.

This does not significantly affect the truly wealthy, but those in the middle want to have a standard of service which is unattainable, given that it's going to be impossible to get "key workers" to actually do the work which the moderately wealthy middle classes think they deserve!