A recently published study has revealed the most common reasons why tenancies end.
The English Private Landlord Survey (EPLS) was published in early 2019 by the Ministry of Housing, Communities & Local Government, and questioned landlords and letting agents on a number of issues.
Why do Tenancies End?
Landlords and letting agents who had had a tenancy end in the past two years were asked for the reasons the tenancies had ended.
The survey revealed that 75% of these tenancies had ended for tenant driven reasons, with 50% of tenancies ending because tenants opted not to renew, with a further 25% of tenants reportedly moving out before the end of the tenancy.
Outside of these tenant driven reasons, landlords and agents reported that when they had ended the tenancy:
- 7% of the time, the tenant was asked to leave.
- 7% of the time, the tenant was evicted.
- 4% of the time, the landlord or letting agent decided not to renew the tenancy.
Why do Landlords and Letting Agents End Tenancies?
When the landlord or letting agents have decided to end the tenancy, the primary reason is due to tenants being in rent arrears.
Unfortunately, the survey did not specifically explore this piece of data further, as it would be interesting to know among landlords who evicted tenants for being in arrears the percentage that opted for a section 21 "no fault" eviction rather than going down the section 8 route.
In addition to the 58% of landlords and agents who have chosen to end a tenancy due to the tenant being in arrears:
- 45% ended a tenancy because the property was not being cared for.
- 18% ended a tenancy to give themselves time to refurbish and then re-let the property.
- 14% ended a tenancy to enable them to sell the property.
- 9% ended a tenancy due to the tenant making too many complains about the property.
- A small number of landlords and letting agents said they had ended a tenancy in order to re-let the property at a higher rental amount.
Do Landlords Need to End a Tenancy to Increase the Rent?
Landlords can raise the rent by issuing a section 13 notice to tenants. If you are planning on a longer tenancy then it is worth considering including a notice in your tenancy agreements that the rent may be increased at specific intervals. Even if you only ever issue six or 12-month tenancy agreements, it is worth including a similar notice so tenants are aware that the rent may increase, and they don't just assume the rent level will remain the same in the event of a renewal. For this reason it is also worth ensuring you do renew your tenancy agreements rather than allow tenancies to become periodic.
If you're considering a large increase to the rent, and you're aware of your tenant's financial circumstances and that they might not be able to cope with a rent increase, it may be easier to end the tenancy and then re-let at a higher rent, although you may need to be mindful of any void period while you advertise to new tenants, as well as the competitive rental landscape in your area and the rental price being charged for similar properties.