Rental Rights Act

[SwingsitlikeHogan]

We are debating what to do with my MiLs house now that we own it. One option is for us to become landlords and rent it out. My problem is that I can’t find an answer to a very simple question in respect of an application under Section 8 of the legislation to end tenancy, following implementing the provisions of the Act (sometime this year?)

Firstly I understand that if there are no tenancy issues I will not be able to end a tenancy within the first 12 months…though it is not clear to me whether, given I’d have to give a tenant 4 months notice, I can raise a request to end the tenancy after 8 months…or if I have to wait until a minimum of 12 months are up before doing so. Online advice is not clear or is contradictory.

Bit more fundamentally, under the new legislation I can’t see that any of the Section 8 Grounds under which I can raise a Section 8 request to end tenancy apply to the situation where I simply want to regain possession of my house for it to be used as a second or holiday home - so absolutely not my primary residence or to sell it.

I’ve looked on a good few advice sites but can’t find anything that covers our specific need…which seems to be pretty straightforward and an obvious one that should be covered.

Any help clarifying this would be very much appreciated.

 

[Hobbit]

Sorry, can’t help with the legislation. However, I do sometimes question why older people go into renting out property. Yes it will give you a decent, probably better long term return whilst your equity continues to rise to but look at it another way…

Some really rough, off the cuff thoughts.

Option 1…

Let’s say you’re 65 years old and the property is worth £250,000. Rented out at a £1,000 a month, you’ll make £12,000 a year less costs and tax. Call it £8,000 a year, maybe more. 20 years will give you £160,000 + inflationary rent rises but less the replacement and repair costs. But in 20 years time it could be worth £700,000 which you pass on to your family.

Option 2…

If you sold now you’d have £250,000 for draw down. Take £10,000 out through the year leaves £240,000 + interest at around 3% minimum. Call it £246,000 at year end. Rinse and repeat on the draw down.

My preferred option is option 2. No hassle, no dodgy tenants, no hidden costs. Option 1 might be a better money making option but do you want the hassle in your twilight years? Some people do, some don’t. For me, renting out is a younger person’s game.

 

[HampshireHog]

We are debating what to do with my MiLs house now that we own it. One option is for us to become landlords and rent it out. My problem is that I can’t find an answer to a very simple question in respect of an application under Section 8 of the legislation to end tenancy, following implementing the provisions of the Act (sometime this year?)

Firstly I understand that if there are no tenancy issues I will not be able to end a tenancy within the first 12 months…though it is not clear to me whether, given I’d have to give a tenant 4 months notice, I can raise a request to end the tenancy after 8 months…or if I have to wait until a minimum of 12 months are up before doing so. Online advice is not clear or is contradictory.

Bit more fundamentally, under the new legislation I can’t see that any of the Section 8 Grounds under which I can raise a Section 8 request to end tenancy apply to the situation where I simply want to regain possession of my house for it to be used as a second or holiday home - so absolutely not my primary residence or to sell it.

I’ve looked on a good few advice sites but can’t find anything that covers our specific need…which seems to be pretty straightforward and an obvious one that should be covered.

Any help clarifying this would be very much appreciated.

The BBC website appears to answer all your questions.

 

[The Squirrel]

Sorry, can’t help with the legislation. However, I do sometimes question why older people go into renting out property. Yes it will give you a decent, probably better long term return whilst your equity continues to rise to but look at it another way…

Some really rough, off the cuff thoughts.

Option 1…

Let’s say you’re 65 years old and the property is worth £250,000. Rented out at a £1,000 a month, you’ll make £12,000 a year less costs and tax. Call it £8,000 a year, maybe more. 20 years will give you £160,000 + inflationary rent rises but less the replacement and repair costs. But in 20 years time it could be worth £700,000 which you pass on to your family.

Option 2…

If you sold now you’d have £250,000 for draw down. Take £10,000 out through the year leaves £240,000 + interest at around 3% minimum. Call it £246,000 at year end. Rinse and repeat on the draw down.

My preferred option is option 2. No hassle, no dodgy tenants, no hidden costs. Option 1 might be a better money making option but do you want the hassle in your twilight years? Some people do, some don’t. For me, renting out is a younger person’s game.

Or just chuck the 250k into equities and take the dividends then let the kids inherit the pot.

I agree the problem with a lot of property investment is that it is far from just investment and rapidly becomes both a headache and a part-time job. The fact you're already researching property law and finding it not so easy kind of shows this. Ironically, the historical returns from simply buying random equities (i.e. simple tracker funds), which takes all of 10 minutes a year to manage, is better than property too over nearly every timeframe, but people prefer property as it's tangible and is the national religion.

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[Lord Tyrion]

My BiL has 2 properties that he rents out. Few calculations take into account the times between tenants, the repairs and upgrades that new tenants request before they move in. These can often take 2-3 months worth of money from the annual income.

His rate of return has been poor in the 6-8 yrs he has had these houses. He would certainly have made more from a basic tracker, as per @The Squirrel pointed out.

I appreciate this doesn't answer the OP but it's something to mull over, add it into the mix.

 

[BrianM]

I’m not sure if it’s the same down south, but I’ve literally just left my job and sold my property where I worked due to having to pay double council tax as it was a second home, worth looking into.

 

[SwingsitlikeHogan]

I had a look and could only find an overview ‘What it means for you’ article, and though this answers the ‘I want my house back to live in or sell’ question…it doesn’t answer the ‘I want my house back to use as a holiday/second home’ question. Truth is that renting is way down the list of our ‘What do we do’ options - certainly below Airbnb. But we’d just like to understand the new legislation around renting.

And @BrainM - yes - a lot of councils (most?) apply double council tax to 2nd homes but I don’t think NE Derbyshire Council - where our house is - does.

 

[Lord Tyrion]

I had a look and could only find an overview ‘What it means for you’ article, and though this answers the ‘I want my house back to live in or sell’ question…it doesn’t answer the ‘I want my house back to use as a holiday/second home’ question. Truth is that renting is way down the list of our ‘What do we do’ options - certainly below Airbnb. But we’d just like to understand the new legislation around renting.

And @BrainM - yes - a lot of councils (most?) apply double council tax to 2nd homes but I don’t think NE Derbyshire Council - where our house is - does.

I would have thought that the question ends when you start with 'i want my house back.....'. Why is your own business.

I suspect you are over complicating this. It isn't a rule of golf that can be interpreted 20 different ways

 

[SwingsitlikeHogan]

I would have thought that the question ends when you start with 'i want my house back.....'. Why is your own business.

I suspect you are over complicating this. It isn't a rule of golf that can be interpreted 20 different ways

I’m not so sure…they usually word such things carefully. And in my experience rules of golf are very specific, requiring the only words to be read are those written…with no ‘reading between the lines’

 

[Lord Tyrion]

I’m not so sure…they usually word such things carefully. And in my experience rules of golf are very specific, requiring the only words to be read are those written…with no ‘reading between the lines’

Have you read the threads in the rules section?

 

[SwingsitlikeHogan]

Have you read the threads in the rules section?

Yes of course, but the clarifications and discussions are usually around curious or unusual scenarios…usually

Here I am talking about what is surely a very basic aspect of renting out a property… viz…Can I end a tenancy on the basis that I want the house back, but not to sell and not to live in as my primary residence.

If Ground 1 of Section 8 applies to my scenario then great…I just can’t find anything that explicitly tells me that..it’s a basic and obvious question for many potential landlords surely.

 

[Bunkermagnet]

Yes of course, but the clarifications and discussions are usually around curious or unusual scenarios…usually

Here I am talking about what is surely a very basic aspect of renting out a property… viz…Can I end a tenancy on the basis that I want the house back, but not to sell and not to live in as my primary residence.

At the moment you can issue a section 21 and evict your tenants with a month or 2s notice. However, if they stay put and refuse to go you will end up going through the legal process and probably bailiffs to evict them.
TBH, knowing your beliefs and how you were with your son a few years ago, I’m very surprised you are talking about when you can evict a tenant because you want to be an AirBnB . Just one extra thing on that, you need to check the time limit you can put it on Airbnb, I’m sure it’s a maximum of 3 months.

 

[Lord Tyrion]

Yes of course, but the clarifications and discussions are usually around curious or unusual scenarios…usually

Here I am talking about what is surely a very basic aspect of renting out a property… viz…Can I end a tenancy on the basis that I want the house back, but not to sell and not to live in as my primary residence.

But you are adding scenarios that may not be relevant. You want your house back, the why is not required. I want the house back to paint it purple and add a slide instead of a stairway, is that mentioned in the Bill? It's a classic rules scenario where 3 pages are added unnecessarily.

 

[SwingsitlikeHogan]

At the moment you can issue a section 21 and evict your tenants with a month or 2s notice. However, if they stay put and refuse to go you will end up going through the legal process and probably bailiffs to evict them.
TBH, knowing your beliefs and how you were with your son a few years ago, I’m very surprised you are talking about when you can evict a tenant because you want to be an AirBnB . Just one extra thing on that, you need to check the time limit you can put it on Airbnb, I’m sure it’s a maximum of 3 months.

My question is simply whether we could under Section 8 Ground 1. We are faced with a significant cost to upgrade the house, and have to make a decision around whether we sell the house as it is, or if we keep it…and if we keep it what do we do with it, and what do we spend money on. What we might spend if we keep it as a 2nd home could be a lot less than the costs associated with upgrading for rental or AirBnB.

The new legislation is very clear that a tenancy cannot be ended if the property owner intends to AirBnB it. If we go down the Airbnb route we’d do it at some time without previously going down a rental route. I’ve not seriously looked down the AirBnB route so don’t understand the background to your final point…but I will. Thanks

 

[SwingsitlikeHogan]

But you are adding scenarios that may not be relevant. You want your house back, the why is not required. I want the house back to paint it purple and add a slide instead of a stairway, is that mentioned in the Bill? It's a classic rules scenario where 3 pages are added unnecessarily.

The why seems relevant because the legislation states that I, or a member of my family, intends to move in. At the moment we do not intend to move in - though we could see our son moving in at some point in the future.

On the decorating side. The legislation allows a tenancy to be ended under Ground 3…The landlord must show they ‘intend to demolish or reconstruct the whole or a substantial part of the dwelling-house or to carry out substantial works’ to the whole or a considerable part of the property. Also, they must be able to show that the work can’t be reasonably done while the tenants are living in the property’

 

[cliveb]

Can't help with any of the new legislation, but as a former landlord I can say that renting out a property can be a major PITA.
We hear about dodgy landlords a lot, but my experience is that there are dodgy tenants too, and they appear to have the law mainly on their side.
If you appoint an agent to manage the tenancy, be prepared for them to be hopeless in helping out with issues: all they are interested in is taking their 10% (or more) cut.
Tread very carefully. My advice: sell the house and invest the money elsewhere.

 

[SwingsitlikeHogan]

Can't help with any of the new legislation, but as a former landlord I can say that renting out a property can be a major PITA.
We hear about dodgy landlords a lot, but my experience is that there are dodgy tenants too, and they appear to have the law mainly on their side.
If you appoint an agent to manage the tenancy, be prepared for them to be hopeless in helping out with issues: all they are interested in is taking their 10% (or more) cut.
Tread very carefully. My advice: sell the house and invest the money elsewhere.

Thanks. Truth is that it is highly unlikely that we’d go down the rental route for reasons you have given, as well as personal, the personal one being that we might wish to use the house ourselves some time in the future subsequent to any rental period, and as you say rental feels like a PITA.

There are circumstances and scenarios we can envisage where a young couple might wish or be happy to rent on a temporary short term basis, and that a year would be adequate for their purposes. We would not be looking at doing medium term, never mind long term, rental.

Just looking for clarification on the new legislation to help us in our decision making.

 

[Imurg]

@PhilTheFragger had a dodgy tenant a while back..he might some idea...

Not a route I'd, personally, want to go down...too many ifs and buts and a PITA to boot.

 

[Bunkermagnet]

Thanks. Truth is that it is highly unlikely that we’d go down the rental route for reasons you have given, as well as personal, the personal one being that we might wish to use the house ourselves some time in the future subsequent to any rental period, and as you say rental feels like a PITA.

There are circumstances and scenarios we can envisage where a young couple might wish or be happy to rent on a temporary short term basis, and that a year would be adequate for their purposes. We would not be looking at doing medium term, never mind long term, rental.

Just looking for clarification on the new legislation to help us in our decision making.

My thoughts are....knowing your social views, why not just sell it to perhaps a young couple or family, looking to get on the property ladder. That way you have no worries about spending money to do it up, it's sold as it is and in an original condition with nothing being hidden (as is so often the case).
You get the money, to do as you wish, and you can have a clear conscience knowing you have helped someone get onto the property ladder.

 

[Crazyface]

As someone who rents a place out, I'd avoid it. The laws have changed a lot and make it a massive minefield. Mine is rented to family, so makes it a lot easier (he's gives me no trouble, but OMG he's destroyed the place to the point I won't sit down or even have a brew when offered, when I actually do go round).