Housing industry divided over controversial three-year tenancy plans

 

The proposed extension of standard tenancy contracts to three years is up for consultation, but some think the policy misses the mark in improving the rented sector for tenants and landlords.

Most shorthold tenancy agreements in England are for either six months or 12 months, with landlords able to increase rents or evict tenants at the end of their contracts without having to give a reason. In a bid to improve security for tenants, particularly as more young families now live in rented accommodation, housing, communities and local government secretary James Brokenshire is proposing a minimum three-year contract for tenants.

The consultation, published today, will look at preventing landlords from ousting tenants before the end of an agreed three-year term, although tenants would still be able to leave before the end of the agreement, subject to a notice period.

The idea is to offer more protection to tenants, as well as to create rental environments with more of a community basis as renters would stay in one place for longer and be able to put down roots. For many tenants, moving house every six months to a year is expensive, and the new long-term contracts would help ease this issue.

Brokenshire said: “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.

“Being able to call your rental property your home is vital to putting down roots and building stronger communities. That’s why I am determined to act, bringing in longer tenancies which will bring benefits to tenants and landlords alike.”

Do tenants want to stay for longer?

However, the National Landlords Association (NLA) has pointed out that the proposals may not actually benefit the majority of tenants, with 40% of current renters saying they did not want longer tenancies – although 40% said they would like them. A further 20% said that they were granted a longer tenancy by their landlord when they asked for one, according to NLA research.

Richard Lambert, chief executive of the NLA, commented: “It’s hard not to see this as more of a political move aimed at the renter vote than a genuine effort to improve how the rented market works for all those involved.”

As an estimated 46% of 25-34-year-olds now live in private rented accommodation, the sector in general has seen huge shifts in recent years. Many people are choosing to rent due to the flexibility and not wanting to be tied to a mortgage as early in life, and as such the build-to-rent sector – which involves developments designed specifically for purchase by landlords and investors to be rented out – has seen massive growth.

People now expect more from their rental homes, and on one hand may want to stay in their accommodation for longer as it is seen as their “home”. On the other hand, a big part of the attraction of renting is being able to move frequently depending on circumstances like jobs and family commitments, so whether a three-year tenancy would be helpful remains to be seen.

The government added: “The three-year model is one of a range of options and the consultation seeks views on longer minimum tenancies, which are used in other countries, as well as ideas on how to implement the model agreement.”

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Housing industry divided over controversial three-year tenancy plans

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