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Miliband plans to introduce compulsory three-year tenancies

Adam Williams
Written By:
Adam Williams
Posted:
Updated:
01/05/2014

Ed Miliband has unveiled plans to force landlords to offer three-year tenancies as standard as part of a shake-up of the private rental sector.

The Labour leader wants three-year deals to become the norm for tenants and has also announced plans to cap rent rises and axe letting agent fees.

At present most buy-to-let mortgages limit landlords to offering tenancy agreements of 12 months and Miliband’s plans allow landlords with an existing buy-to-let mortgage which does not cater for longer tenancies to be exempt from the proposed legislation.

Long-term tenancies are already offered in countries including Germany and Ireland. Miliband’s plans would see tenancies start with a six month probation period followed by an automatic two-and-a-half-year extension if the probabtion was passed.

Landlords would only be able to terminate a tenancy if the tenant falls into arrears, breaches their tenancy agreement, if they want to sell the property or change its use. Tenants would remain able to give one month notice at any time.

Exemptions would also exist for student tenancies and workers on temporary contracts.

Under plans to cap rent rises, landlords will be able to set rents based on market value but legislation will prevent excessive increases. The Royal Institute of Chartered Surveyors is currently examining what an appropriate benchmark might be.

Letting agents would be banned from charging fees to tenants when they enter into a rental agreement, with any fees instead charged to landlords.

Miliband said: “We need to deal with the terrible insecurity of Britain’s private rental market as well. Many tenancies last just six months with families at risk of being thrown out after that with just two months’ notice with no reason.

“Some are told to accept huge rent rises or face eviction. It breeds instability and that is bad for tenants, bad for families, bad for landlords, and bad for our society.

“So today I can announce, the next Labour government will legislate to make three-year tenancies the standard in the British private rented sector to giving people who rent the certainty they need. These new longer-term tenancies will limit the amount that rents can rise by each year too – so landlords know what they can expect each year and tenants can’t be surprised by rents that go through the roof.”


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