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Tenancies: Rentals Index

Rentals INDEX: Tenancies

Investing in property generally means getting involved with tenants and tenancies. It's obviously very important that, when you buy an investment property, you are able to find tenants, and quickly, so you immediately have some income to help cover the cost of your finance.

With residential tenancies, since 1997 almost all tenancies are Assured Shorthold Tenancies, which were introduced by the Housing Act 1988. Prior to this many tenancies were controlled by the old Rent Acts, some well meaning but misguided legislation giving tenants disproportionate rights, which discouraged investment and lettings. In fact tenants could stay for life and rents were controlled at un-economic levels - most landlords abandoned the residential lettings business completely.

The 1988 Act restored the balance and the 1996 amendments really restored the property investor's faith in the rental property business. Since then, as everyone knows, the rental business has grown significantly in the UK, along with the growth in property values and rental demand. Socio-economic factors and the advent of the Buy-to-Let mortgage have, since around 1997, combined to created the biggest growth in property investment and letting ever experienced in the UK.

Commercial Tenancies have been different: although commercial tenants do have some statutory protection under the Landlord & Tenant Act 1954 Part 2, mainly to give security of occupation when their tenancy ends, the business landlord / tenant relationship is much more a contractual one compared to a residential tenancy.

This means that when a commercial tenant fails to pay rent, the landlord can take quite drastic action, instructing bailiffs or forfeiting the lease in very little time at all. In theory, the residential landlord can also regain possession when faced with a non-paying tenant, but the process can drag on for months with a recalcitrant tenant resisting eviction by slow moving courts.

 

Information here is general only & believed to be correct, though we cannot guarantee it, nor do we accept any liability if you act or fail to act on this information. Always seek professional advice before making decisions. Investments can go down in value as well as up over  time.