With first-time buyers prepared to save for more than five years to get on the housing ladder, opportunity knocks for landlords who make their properties available to home-sharers looking to reduce their living costs.
A study of 40,000 non-homeowners aged between 25 and 40 by mortgage lender Halifax reveals that they are prepared to save for an average of 5.35 years to put together a deposit on their first home.
And analysis of official data by home loan broker the Mortgage Advice Bureau that shows the average age of a first-time buyer is now 37 helps explain why the image of house-sharers is changing from that of students and recent graduates, who live off takeaway food and think vacuum cleaner is a dirty word.
In fact, house-sharing in London is growing in popularity among working professionals who are unable to afford to rent a property alone or even with a partner.
Landlords who target this market most commonly let their property assets on an assured shorthold tenancy because such agreements cover the whole property, not individual tenants, and reduce administration costs.
However, most landlords with experience of the house-share market will be familiar with the not uncommon event of one of the household wishing to move out of the property before the tenancy comes to an end.
With the age profile of house-sharers rising, this is likely to be an increasingly common event for landlords to deal with. But it shouldn’t be a problem for landlords on top of their tenancy management responsibilities. After all, the outgoing tenant is only released from their obligations under the tenancy agreement if they find another suitable tenant to take their place.
To ensure the replacement tenant has the same rights to live in the property as the outgoing house sharer, landlords need to follow the correct Change of Tenancy procedure.
Free downloads from Property Division
The Change of Tenancy procedure should also include issuing your new tenant a Deed of Assignment. To ensure you stay on the right side of housing regulations and give all your tenants peace of mind, Property Division is giving you two free downloads.
Download 1 (Change Of Tenant Procedure)
When a tenant informs you that they wish to leave a shared house before the end of the assured shorthold tenancy, presenting them with a Change of Tenant procedure will make clear their rights and responsibilities.
The document covers finding replacement tenants, references and explains arrangements for paying a deposit for the room and how and when the rent should be paid.
Information for Tenants
Download 2 (Deed of Assignment of Tenancy)
After the outgoing tenant finds a replacement, landlords do not need to increase their administration costs by drafting a new tenancy agreement.
Instead, all parties can complete a deed of assignment. This legal document needs to be signed by the new tenant, the departing tenant, the remaining tenant(s) and the landlord because it confirms:
- The outgoing tenant is leaving and is being released from the contract.
- The incoming tenant is moving in and wishes to be bound by the terms of the contract
- The remaining tenants and you, the landlord, agree to this arrangement