The UK government's recent decision to scrap Section 21 has left many landlords feeling uneasy. This section of the Housing Act 1988 allowed for no-fault eviction of tenants, but now landlords will have to use Section 8 of the same act to evict tenants for justifiable reasons such as rent arrears and damage to the property. The announcement of the Renters Reform Bill marks a new era in tenancy rights, and landlords need to start thinking about alternative options to retain control over their properties and income. One solution that could potentially benefit landlords is serviced accommodation.
Firstly, to understand how serviced accommodation can help landlords navigate the ending of Section 21, we must first understand what it is. Serviced accommodation refers to furnished apartments rented out for short-term stays, complete with hotel-like amenities such as cleaning and fresh linens. By offering this kind of accommodation, landlords are able to cater to a wider range of tenants, including business travellers, families on vacation, and even tenants who are not quite ready to commit to long-term rental agreements.
Furthermore, serviced accommodation is exempt from the eviction procedures outlined in the Housing Act 1988 because it falls under the category of holiday lets. Landlords can choose to rent out their properties for a minimum of 90 days per year as serviced accommodation, effectively avoiding the need for eviction procedures altogether. Serviced accommodation is, therefore, a viable alternative to long-term rentals and the pitfalls associated with them.
Another advantage of offering serviced accommodation is the flexibility it provides landlords when it comes to pricing. Due to its short-term nature, landlords can adjust the price per night based on market demand and the season. This means that landlords can capitalise on peak travel periods and increase the nightly rate, driving revenue and profitability. Serviced accommodation providers can take advantage of this by including additional services such as concierge services, airport transfer services, and even grocery deliveries to create a more personalised experience for tenants. This generates additional revenue opportunities and creates a strategic edge in the market.
In addition to all the advantages of serviced accommodation, landlords can also enjoy peace of mind knowing that their properties will be well-maintained. Since serviced accommodation is synonymous with a hotel stay, tenants expect a high level of cleanliness and maintenance. This provides landlords with a significant incentive to ensure the property is adequately cleaned and maintained between stays. By prioritising the upkeep of the property, landlords can guarantee repeat customers, and benefit from positive reviews from satisfied tenants. Therefore, a well-maintained property can lead to increased word-of-mouth referrals, thereby creating a self-sustaining income stream for landlords.
Conclusion:
The ending of Section 21, coupled with the new Renters Reform bill, poses a challenge for landlords. However, rather than conceding defeat, landlords can use this opportunity to innovate and explore alternative options to long-term rentals. Serviced accommodation presents an attractive proposition for landlords looking to unlock new revenue streams, while simultaneously avoiding the legal hassles associated with long-term rentals. By capitalising on the benefits of serviced accommodation, landlords can weather the storm of the Renters Reform Bill and continue to generate enduring income streams from their properties.
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