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Landlords: Government Proposals for Minimum 3 year Residential Tenancy

Posted on July 9th 2018 by

The Ministry of Housing, Communities and Local Government (“MHCLG”) is proposing a minimum 3 year fixed term for residential tenancies, with a six month break clause. The main proposals are:

  1. A three-year term with an opportunity for either landlord or tenant to leave the agreement after the initial six months.

  2. Following the six-month break clause, the tenant would be able to end the tenancy by providing a minimum of two months' notice in writing.

  3. Landlords would be able to recover their property during the fixed term if they had reasonable grounds, similar to the grounds under Schedule 2 to the Housing Act 1988.

Assured shorthold tenancies currently grant tenants a minimum of 6 months by way of the initial fixed term. Tenants have security of tenure during the initial fixed term as any order for possession following service of a notice under section 21 of the Housing Act 1988 will not take effect earlier than 6 months after the beginning of the original tenancy.

It is the government’s view that longer tenancies would benefit tenants and landlords; tenants face instability with short term contracts, a lack of power and the potential cost of unplanned and unwanted moves, whereas longer tenancies would save time and money spent on unnecessary renewals.

Holiday lets will fall outside the proposed new regime, as realistically they do not last for 3 years.  

The consultation will also consider how to implement the new regime, the need for legislation, tax relief for landlords and awareness raising initiatives.

The consultation closes on 26 August 2018.

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