Two-month notice periods for tenants under periodic tenancies will negatively impact the build-to-rent sector and encourage sub-letting homes as party flats, the boss of big BTR firm Grainger has told MPs.
Giving evidence at the Renters Reform Bill Commons Committee, chief executive Helen Gordon (main image) said a notice period of six months was preferable. “It’s at the core of our BTR business model to encourage long-term renting,” she said.
The minimum term [as part of the Bill] will affect the planning of BTR and financing. It will also have an impact on smaller buy-to-let landlords as most of their financing has a requirement in it for a minimum term – two months would be in breach of most lenders’ requirements and definitely in breach of a lot of capital requirements in the build-to-rent sector.”
Gordon explained that uncertainty around minimum terms and financing was curtailing some firms’ ability to invest in the sector. “Others have rowed back from investment. You can see a drop in the number of schemes coming forward.”
She added that in London, up to 10% of people only wanted to rent for a couple of months; by having a shorter minimum term, it would lead to “a lot of Airbnb and transient” lets.
Gordon said the firm welcomed lowering the bar on anti-social behaviour to prevent people sub-letting homes as party flats at weekends, causing disruption to the whole block.
“If you get anti-social behaviour, that can have a very detrimental effect on the whole community. Once we had to empty six homes around a problem property, and it took 15 months to get possession through the courts.”
Grainger owns 10,000 rental homes and has built 1,640 more around the UK in 2023.