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Still no detail on Government’s sub-letting threat

The Government is still not giving any detail on its in-principle proposal, set out in the small print of this week’s Budget, to allow private tenants the right to sub-let their properties.The Department of Communities and Local Government told Letting Agent Today that it was not yet in a position to give details on the proposal, which was on page 51 of the Budget Red Book – the document which is released after the Chancellor makes his Budget speech.

It reads: “The government wants to ensure that Britain is the global centre for the sharing economy, enabling individuals and businesses to make the most of their assets, resources, time and skills through a range of online platforms. This Budget therefore announces a comprehensive package of measures that will break down barriers, create opportunities for sharing, and unlock the potential of this dynamic and growing area.

“Building on the recommendations of the independent review of the sharing economy, the government will: make it easier for individuals to sub-let a room through its intention to legislate to prevent the use of clauses in private fixed-term residential tenancy agreements that expressly rule out sub-letting or otherwise sharing space on a short-term basis, and consider extending this prohibition to statutory periodic tenancies.”

Some analysts on social media have interpreted this to mean that the short-let tenancy relaxation introduced by DCLG in London – to allow individual home owners as well as amateur and professional landlords to emulate the likes of AirBNB – will be extended across the country.

Others, like the Residential Landlords Association and tenancy eviction company Landlord Action, have taken this to mean that private tenants will themselves be able to sublet their own accommodation.

Paul Shamplina, founder of Landlord Action, says if this policy goes ahead it will thrown up a magnitude of problems in the buy-to-let industry.

“We have never seen so many sub-letting cases going to court because of unscrupulous tenants trying to cream a profit from a property they have rented. We experience continual problems with tenants taking out tenancy agreements and then, in some instances, not even moving into the property themselves, but putting up partitions and sub-letting to as many people as possible” says Shamplina.

“They draw up separate agreements and trick sub-tenants into thinking they are the landlord.  By the time landlords find out, damage to properties from over-crowding can run into thousands, and the tenant who holds the legitimate tenancy agreement is no-where to be found” he says.

Landlord Action is currently involved in the making of a Channel 5 documentary on subletting, which will air over the summer.

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