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Longer tenancies: more security for renters or a vote grabbing political move?

An estimated 46% of 25-34 year olds live in private rented accommodation. This has risen from 27% in 2006-2007 and, as such, the build-to-rent sector has seen massive growth. Of these, 81% of rental contracts are assured shorthold tenancies (ASTs) with a minimum fixed term of just six or twelve months, most allowing landlords to increase rents or evict tenants at the end of their contracts, without giving reason.

This can leave tenants feeling insecure, unable to challenge poor property standards (for fear of tenancies being terminated) and unable to plan for their future.

Earlier this month, the Secretary of State for Communities, Housing and Local Government, James Brokenshire, proposed the introduction of a minimum three year tenancy, with a six month break clause.

He wishes to offer greater protection to tenants, creating rental environments with more of a community basis. Tenants would be able to use the six month break clause and have greater protection if they wanted to stay for the full three years. Moving every six-twelve months can be expensive (deposits / moving costs / agents’ fees) and the proposals would help ease this issue. However, the proposal is not favored by everyone.

However, shadow housing secretary John Healey countered by saying this latest promise is ”meaningless if landlords can still force tenants out by hiking up the rent”.

But do tenants want longer tenancies? According to the National Landlords Association (NLA) only four out of ten tenants actually want longer contracts, and according to government data (even with the current forms of tenancy available) people stay in their rented homes for an average of nearly four years.

The proposals will help landlords avoid costly periods whilst searching for new tenants, offering them the flexibility to regain their properties when their circumstances change. However, many landlords worry about the time it can take to gain possession of their property in the courts. To this end, a call for evidence will be published this autumn to better understand the experience of users of the courts and tribunal services, including considering the case for a specialist housing court.

An eight-week consultation (until 26 August) is now underway and ministers are seeking views from landlords, tenants and other related organisations.

Lenders may also take an unfavourable view which could have a dramatic impact on the buy-to-let industry. ASTs gave lenders the confidence to grant mortgages against properties, as they knew they could repossess the property at short notice if necessary. But will the proposals make lenders wary about granting loans, or will they decide to increase the interest rate to reflect the additional risk? A further disadvantage for landlords.

Source: Property Week

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UK property: Tenants to be offered longer tenancies?

Three-year tenancies are being proposed by the UK government, underlining the continued demand for rental property and the need for greater regulation in the sector.


  • The UK government is consulting over the minimum tenancy term in the country
  • Under new proposals, tenants would be able to access three-year tenancy terms, helping people to “put down roots” without worries over short tenancies
  • Not only does it underline the growing reliance on the UK’s rental sector, but also the need for greater reform to provide more professional standards of management

UK tenants could soon be able to live in their rental property with three-year tenancies.

New government proposals aim to give more security to renters, with consultations on minimum tenancy lengths likely to continue until August 2018.

It comes at a time when homeownership rates in the country have fallen to 63% in 2017, compared with 72% 10 years’ previous. Of course, while affordability is preventing many people from making it onto the property ladder, there’s also a rising number of tenants that are turning to the rental sector as their long-term rental solution.

Indeed, research published in June found that 70% of UK tenants have no plans to buy a property in the future.

As a result, the UK government has recognised the importance of improving standards for those living in the country’s rental market. Tax reforms in recent years have been regarded as a means of moving the UK away from its traditional, outdated buy-to-let sector, and to instead focus investment into the purpose-built rental sector.

And these tenancy reforms, the government argues, would help those tenants that want to stay in the same rental property for a longer period of time to feel more settled in their home.

“It is deeply unfair when renters are forced to uproot their lives or find new schools for their children at short notice due to the terms of their rental contract,” argued Communities Secretary James Brokenshire.

“Being able to call your rental property your home is vital to putting down roots and building stronger communities.”

Source: Select Property

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Incentives For Longer Tenancies Favoured By Buy To Let Sector

Proposals for incentives for property investors offering longer tenancies are being welcomed by the buy to let sector.

The much-publicised consultation on the matter of three year tenancies has recently seen the government propose a number of options in order to aid the implementation of the three-year tenancy model. The proposals come in response to a growing demand from families and older people for longer tenancies in the private rental market. The government had suggested that it would be consulting on plans to have three-year tenancies as standard, with a six-month break clause and certain exemptions for students.

One of the options proposed by the government is financial incentives. The government argues that these could be ‘quicker to implement’ than mandatory three-year tenancy agreements.

Policy director for the Residential Landlords Association, David Smith, spoke out about the matter: ‘With landlords having faced a barrage of tax increases we believe that smart taxation, such as that being proposed today, would provide the longer term homes to rent many families and older people want. We would warn against making it a statutory requirement to introduce three year tenancies. Many tenants simply do not want to be tied to a property long term. It is vital that the market is able to provide the flexibility that many need in order to swiftly access new work and educational opportunities.’

In contrast, Build To Rent operators were in support of the government’s proposed three year tenancies in the private rental sector. Managing director at Moda, a BTR developer, Johnny Caddick said: ‘It makes sense that residents are given security of tenure. So we support these moves provided people have flexibility if they only wish to stay for a year or two. We need a customer-centric rental market if people are to grow confidence in the property sector. That has to mean encouraging more rental development through the planning system that is willing to provide better homes with no risk of eviction because the landlord wishes to sell or move back in.’

Source: Residential Landlord