Consultation on minimum three-year residential tenancy with six-month break clause

Assured shorthold tenancies (ASTs) grant tenants a minimum of six months security of tenure. Any order for possession following service of a notice under section 21 of the Housing Act 1988 (HA 1988) will not take effect earlier than six months after the beginning of the original tenancy (section 21(5), HA 1988).

The government believes that longer tenancies would be more beneficial to both tenants and landlords. On short term contracts, tenants face instability, a lack of power and the potential cost of unplanned and unwanted moves. On the other hand, longer tenancies would save time and money spent on unnecessary renewals.

Therefore, the Ministry of Housing, Communities and Local Government (MHCLG) is consulting on its proposed model for a minimum three-year residential tenancy with a six-month break clause, and the options for implementing this.

The main facets of the model would be:

  • A three-year term with an opportunity for either landlord or tenant to leave the agreement after the initial six months.
  • 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.
  • Landlords would be able to recover their property during the fixed term if they had reasonable grounds, akin to the grounds under Schedule 2 to the HA 1988.

Certain tenancies will fall outside the parameters of the new regime: for example, holiday lets which realistically do not last for three years. Further, rents would only be able to increase once per year, and any agreement on rent should be detailed in the tenancy agreement.

The government is considering particular aspects of implementing the new regime, including the need for legislation, tax relief for landlords, and awareness raising initiatives.

The consultation closes on 26 August 2018. The proposals apply to England only.

Source: MHCLG: Overcoming the barriers to longer tenancies in the private rented sector (2 July 2018) and Practical Law.

Our residential property expert, Sophie Maddox advises on the new tax regime in Wales

Buying a residential property in Wales?

Make yourself aware of the changes now!

Wales will no longer follow the system of Stamp Duty Land Tax (SDLT) under HM Revenue & Customs. As from April 2018 Wales will be working with the new Welsh Revenue Authority (WRA), who are a non-ministerial department of the Welsh Government that will be responsible for collecting and managing Land Transaction Tax (LTT).

What are the differences?

The first time buyer’s  exemption rule, which was brought in to England in November 2017 will not apply in Wales.

Under this new system purchasers will pay tax on the amount between bands, and not the full purchase price.

If the purchase of the new property results in a person owning more than one property the rate of LTT will be slightly higher.

Please see below a table setting out the bands and rates for the new LTT system.

Bands Normal Rate Additional Property Rate
Less than £150K 0% 3%
£150K- £250K 3.5% 6.5%
£250K- £400K 5% 8%
£400K- £750K 7.5% 10.5%
£750K- £1.5M 10% 13%
Over £1.5M 12% 15%


Please do contact me if you have any further enquiries.

Changes to EPC regime announced

Are you a commercial landlord? Changes to EPC regime! If granting a lease after 1 April, you could be at risk of breaching the MEES regulations if the building is sub-standard and you have not registered an exemption. Anything below an F rating means your building is sub-standard. You need to review your EPC NOW as what was an E rating a few years ago, could now be considered an F or G. Contact us for more details.

Tranter Mills complete another multimillion pound deal

Our Managing Director has just completed another deal on a mixed use development purchase for £1.8 million. Of the transaction, Zoe had this to say, “the transaction was fraught with issues from the beginning from land contamination issues, through to travellers occupying the site between exchange and completion. It was a challenge but we achieved completion eventually, ending with one very happy client”.

Our Managing Director has been shortlisted as “Businesswoman of the year 2017”

Our Managing Director has been shortlisted as “Businesswoman of the year 2017”

Zoe Tranter Shortlisted as Businesswomen of the Year in the Birmingham Awards

After a shock nomination, our Managing Director, Zoe Tranter, has been shortlisted to the final five in the category of “Businesswoman of the year 2017”, in the prestigious “Birmingham Awards”. On being shortlisted, Zoe had this to say, “I was shocked, as I had not put myself forward, and to reach this far, is something that I am so very proud of. It is wonderful to have my hard work and dedication acknowledged, but I would not be where I am without the talented individuals that work with me”.

Voting closes on Friday 8 Sept, and you can vote for Zoe here.

Our Legal Apprentice enters the next stage of her training

It can be a long hard road to qualification as a solicitor, and our Legal Apprentice, Sophie Maddox has now entered the next stage of her training to become a solicitor. On Sophie’s performance, our Managing Director, Zoe Tranter said “I am delighted with Sophie’s performance. She is grateful for the opportunity which reflects in everything that she does. She is already demonstrating a use of initiative far beyond her years”.

On her time at Tranter Mills, Sophie commented “I have learned so much working closely with Zoe. The skills I have developed in practice have given me confidence out of the office too. It can be stressful, but we do have a laugh”.

Community Infrastructure Levy review: report to government

On 7 February 2017, the government published an independent report on the effectiveness of the Community Infrastructure Levy (CIL).

The report states that CIL is not achieving its original objective of providing a faster, fairer and more transparent way of collecting contributions towards the infrastructure necessitated by the impact of development.

The key recommendations are that:

  • CIL should be replaced with a hybrid system of a Local Infrastructure Tariff and section 106 agreements (for larger development).
  • Combined authorities should be enabled to set up an additional Mayor-type Strategic Infrastructure Tariff (SIT).

Restrictive covenant modified to allow development which was knowingly carried out in breach by a developer (Upper Tribunal (Lands Chamber))

In Millgate Developments Limited and another v Smith and another, Re: Exchange House, Woodlands Park Avenue, Maidenhead [2016] UKUT 515 (LC), the Upper Tribunal (Lands Chamber) a developer knowingly breached a covenant by building properties intended for social housing on the land in question. The houses overlooked the benefitting land, which was being developed as a hospice for terminally ill children. In exercising its discretion, the Upper Tribunal found that the loss of privacy to the owners of the benefitting land was outweighed by the public interest in housing families in need of affordable housing accommodation. It was decided that money was adequate compensation for the loss of the private rights enjoyed by the benefitting land. The Upper Tribunal therefore allowed the application by the developer to modify restrictive covenants that prohibited development of the land. What is interesting about this decision is the use of the land in question which was the subject of the application. It does beg the question as to what the decision may have been had the development comprised of private sector housing as well.

Autumn Statement – Impact on Property

The following came out of the Autumn statement yesterday:

  • The ban on upfront fees imposed on tenants by letting agents in England and Wales. Scotland has already banned these fees.
  • The announcement that the Land Registry is to remain in the public sector.
  • The announcement that the government is to publish a Housing White Paper setting out its plans for reforms to increase housing supply and halt the decline in housing affordability.
  • £1.4 billion to assist delivery of 40,000 new affordable homes in England and Wales and a further £3.15 million to the Greater London Authority to deliver 90,000 affordable homes in London.
  • £2.3 billion for a housing infrastructure fund to support the building of 100,000 new homes in high demand areas.
  • The creation of a National Productivity Investment Fund to provide major investment in, amongst other things, transport and housing.

The announcement of the ban on fees charged by letting agents in England and Wales is seen by many as another blow to estate agents and landlords. Whilst making landlords responsible for such fees may improve competition, there is concern that it will merely result in a rent increase for tenants as landlords seek to recover the cost.

Contact me for more details should you wish to discuss any of the above issues.

Source: Practical Law