Six months on, we take a look at the effect that the Private Residential Tenancy (PRT) has had on the Edinburgh lettings market.
No minimum term
The removal of the minimum term from tenancy agreements was the change that made Edinburgh landlords the most apprehensive, worried that their properties would experience a never-ending stream of tenancy changeovers when tenants were no longer tied in for an initial 6 month period. This concern has, so far, been unfounded.
At Clan Gordon, we have moved in over 75 PRTs since 1st December 2017, so far just one of these has given notice to move out. It is important to us that our landlords are not out of pocket because of the new regime, so we are working with landlords on an individual basis to minimise the costs involved in tenancy changeovers during the initial 6 month period.
The majority of tenants are looking for good quality properties where they can settle long term, so if they are happy in their new home it is unlikely that they will move out quickly, except in cases where they experience a change in circumstance. Some tenants will be looking specifically for short term lets, but it is the job of the landlord (or their agent) to implement stringent checks to identify this where possible.
The Scottish Government has provided a model tenancy agreement for PRTs, of which we are using a modified version for Clan Gordon tenancies. The PRT agreement is a stand-alone document, meaning that the complicated pre tenancy notices – for example the AT5 – which had to be signed as part of a Short Assured Tenancy are no longer required. Tenants are now given just the tenancy agreement and the accompanying easy read notes to sign when beginning a tenancy. Although the two combined create a lengthy document, the process is considerably more straightforward for tenants than it was under the old regime.
Tenancy paperwork can now be signed and saved electronically by tenants and guarantors from the comfort of their own home. This has made a considerable difference in streamlining the signing of paperwork, allowing multiple tenants to read and sign the paperwork when it is convenient for them, instead of trying to coordinate a time when everyone is available to sign in person.
Signing electronically also means that tenants can take more time to ensure that they have read and understood the paperwork, without the pressure of a letting agent or other tenants being present. Clan Gordon tenants with any questions regarding the tenancy agreement can phone or email Hannah, who will be happy to talk them through the paperwork.
Less marketing time
Tenants with PRTs who want to move out are now only required to give 28 days’ notice, rather than two months as was standard for Short Assured Tenancies, meaning less marketing time to line up new tenants before they vacate. So far this has not been an issue for us – the only PRT that we have re-marketed let quickly with no void period – however, it could potentially create void periods for landlords and letting agents going forward, especially with larger and more expensive properties, which can take longer to let.
Student lettings is one area where we are yet to see the full affect of the PRT. Student tenancies traditionally run from September to May/ June, covering term time, and freeing up properties for the summer months. This arrangement tends to be mutually beneficial for landlords, who can use the property for lucrative short-term summer lets, and tenants, who can go home for summer.
Under the PRT student tenants will have no initial fixed term, meaning that they can give notice to move out at any point during the year. This will potentially result in properties specifically let to students becoming available later in the year, if tenants move out during term time, when there is unlikely to be students looking for properties to replace them, creating void periods for landlords.
Landlords will also have less control over their property being available for summer short term lets – especially lucrative for Edinburgh landlords during the Festival in August – as tenants can continue their tenancy for summer if they wish.
The majority of current student tenancies started in Autumn 2017, before the 1st December introduction of the PRT, so it won’t be until later this year that we will see how this market will operate under the new regime.
In our 2018 Landlord Satisfaction Survey we asked our landlords how likely they would be to improve their property if we were to make recommendations, only 3% of landlords said that they would be unlikely to do so. Although not directly linked to the introduction of the PRT, this suggests that landlords are realising that providing and maintaining high quality homes for tenants is key to longer tenancies.
Although it is still early days for the PRT, changes to the Edinburgh lettings market have, so far, not been drastic. We have not seen a significant number of tenancies ending within the first six months, and neither have we had a mass exodus of landlords selling their properties. For now, the market remains relatively stable, although this may change as landlords and tenants gradually become more aware of the PRT and what it means for them.
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