Protected tenancies are properties that have tenants who are protected from eviction by the Rent Act. The rents are not set in the free market and are regulated by the Valuation Office Agency (the VoA, which was previously known as the Rent Office in each region of England).
Landlords have to submit to the VoA to get a rent increase on their property. This can be done every 2 years. They can apply for a rent increase of say 15%, taking in to account inflation in prices and then VoA will decide whether this is a ‘fair’ increase. To mind, this is totally arbitrary interference in the market.
Usually, the regulated rent is only a fraction of the free market rent, possibly up to 70% but often a lot less. This might depend on what the rent was when it became regulated. Some agricultural and other workers used to pay a ‘peppercorn’ rent on their homes and the VoA would tend not to impose a very great increase on these rents, so in these cases, the rent could still be way below the open market rent for a comparable property.
Many protected tenanted properties are not modernised and can be in poor condition. That is probably a function of the fact that the rents are low. The landlord has less rental income to spend on improving the property and cannot dislodge the tenant during the tenant’s lifetime.
Consequently, the market price for a property sold with an existing protected tenant is considerably less than the open market price for a vacant house (a house with 'vacant possession').
Landlords have to submit to the VoA to get a rent increase on their property. This can be done every 2 years. They can apply for a rent increase of say 15%, taking in to account inflation in prices and then VoA will decide whether this is a ‘fair’ increase. To mind, this is totally arbitrary interference in the market.
Usually, the regulated rent is only a fraction of the free market rent, possibly up to 70% but often a lot less. This might depend on what the rent was when it became regulated. Some agricultural and other workers used to pay a ‘peppercorn’ rent on their homes and the VoA would tend not to impose a very great increase on these rents, so in these cases, the rent could still be way below the open market rent for a comparable property.
Many protected tenanted properties are not modernised and can be in poor condition. That is probably a function of the fact that the rents are low. The landlord has less rental income to spend on improving the property and cannot dislodge the tenant during the tenant’s lifetime.
Consequently, the market price for a property sold with an existing protected tenant is considerably less than the open market price for a vacant house (a house with 'vacant possession').
