let
The Assured Tenancies (Amendment) (England) Order 2010 – SI 2010 No. 908 was laid on 25 March 2010, the Statutory Instrument raising the annual rental threshold for assured, including assured shorthold tenancies to £100,000 will come into effect on the 1st October 2010. The delay between the two dates should have given landlords the opportunity to prepare for the change.
For tenants these changes will benefit from the protection of the Housing Act 1988, new tenants in particular will benefit from tenancy deposit protection. Where new tenancies start after 1 October 2010 and the rent falls within the new threshold you will have to protect the tenant’s deposit in one of the three government-approved tenancy deposit schemes. Landlords will have to comply with all the legal requirments associated with assured shorthold tenancies agreements; they will also have the option to use the accelerated Court procedures for possession, when proposing rent increases, the Housing Act 1988 procedures must be followed.
when the rental threshold is increased on the 1st October 2010 existing common law tenancies landlords have will become assured shorthold tenancies, however landlords will not have to immediately protect their tenants’ deposits in a recognised scheme, although it would be good practice to do so. Where a tenancy is renewed on or after the 1st October 2010, or if a new deposit is taken these do need to be protected in one of the government-approved tenancy deposit schemes, as deposits taken before 1st October 2010 were not taken under an shorthold tenancy and so do not meet the specification for protection under the Housing Act 2004, however the decision when deposits should be protected will ultimately be decided by the courts and you could only speculate the outcome in any particular case.
The legislation is not ‘retrospective’ and will not provide for any transitional arrangements from the 1st October 2010 it will affect all existing and new tenancies therefore if a tenancy would have been assured shorthold tenancies but for the rent being higher then £25,000 will now become an assured shorthold tenancy if their rents are below £100,000, therefore this new rental threshold will affect the existing rights of landlords and tenants who have already taken out tenancy agreements as well as those entering into new agreements on or after 1st October 2010.
Letting agents need to check their existing tenancies, including those managed on a “let-only” and ensure landlords are aware of the change and the implications i.e. existing contracts need to be reviewed to incorporate the change to an assured shorthold tenancy. If you are in any doubt what these changes mean to you please seek legal advice.
Category : Blog
According to LSL Property Services rents rose to £689 in September, surpassing the previous market peak in August 2008, the average UK rent is now 3.1% higher, following eight consecutive months of rises, than they were at the same time last year. In the past three months house price growth matched the rising rents, which meant the average yield remained stable at 4.9% in September. The main driving factor for this rise was the strong performance of the rental market in London and the South East in 2010, London saw the greatest growth, with the capital seeing increases of 1.1% to a new high of £972 followed by 0.9% rise in the South East during September. According to commercial director David Brown of LSL Property Services said that with potential spending cuts on the horizon, and uncertainty over the direction of the economy, many buyers are choosing to remain in rented accommodation for longer, and might be waiting for house prices to fall. With tenant demand continuing to hit new heights because the mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder. “As a result, demand for rental accommodation is increasing, and supply is not rising fast enough to match it,” he added. “This has turned the buy-to-let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”
Category : Blog
In a recent survey carried out by the company, which owns the Uk’s largest lettings agency, LSL property services found that out of every ten landlords surveyed with five or more properties four said they planned to increase their portfolios over the coming year. 48% of those surveyed said they think now is a good time for investing in property and just 2% think it is time to sell up, while smaller buy to let investors (26%) also intended to grow their portfolios. 46% of landlords with large portfolios and 37% of smaller buy to let investors said they had witnessed tenant demand growing, with 64% expecting to see tenant demand continuing grow over the next year and only 7% reported a decline.
LSL Property Sevices Commercial Director David Brown said “optimism is flooding back to the buy to let market, with tenant demand continue to grow”. It is a good time to be looking at property investing as a lucrative long term investment with total annual returns of 13.3%.
Category : Blog
