Longer Tenancies seen as the way forward
Published on 8th August 2018 by Laura West
Calls are being made for changes in the buy-to-let sector to meet the needs of tenants by providing longer tenancies. More than a quarter of people in their late 30s or early 40s are now renting for a variety of reasons. Some simply cannot afford to buy their own home in the area where they wish to live. Others may have split up and moved out of the family home. Because of this, the Residential Landlords Association is calling on the government to make sure landlords have the support needed to meet the change in tenants’ needs.
The research is based on the Family Resources Survey figures, which show the number of middle-aged UK residents who are renting in the private sector has doubled in the past 10 years. This is partly due to soaring house prices, which have left many unable to afford to buy their first home. RLA policy director David Smith said it is not surprising that more people in this age group are finding it difficult to buy their own home and so are renting instead. With average rents being lower than mortgage payments and government data revealing that rents are not rising as much as inflation, it makes sense to many people.
The RLA wants the government to step in to enable landlords to help tenants by offering longer leases. The association is calling on the government to do more in supporting longer tenancies. Mr Smith said older tenants, particularly those who have children, are looking for security in their rental homes. On average, official statistics show tenants stay in a property for nearly four years. So tenants who are happy with their property are willing to stay for a long period, but the security of a longer tenancy would bring greater reassurance. Mr Smith points out that landlords are often prevented from offering longer leases because of their mortgage conditions. An RLA survey showed 44% of landlords have conditions imposed on their mortgages which limit the length of the tenancy they can offer.
The RLA is also calling on ministers to carry out a thorough review to make sure
have the support to meet the change in tenants’ needs. Many landlords are not investing in buy-to-lets or are even selling up because of the tax changes in the rental sector. Obviously, this makes it increasingly difficult for renters to secure decent housing in areas of high demand. Landlords need government backing so they can have confidence in the sector and in offering long-term contracts. As landlords point out, it is difficult to get bad tenants out of their accommodation quickly and inexpensively. If the bad tenants were not offered so much protection – and landlords were offered more protection – then they would consider offering longer leases.
Action needs to be taken now to meet the increasing needs of decent tenants who are looking for the security that long-term rentals offer. Many landlords realise the benefits of long-term tenants in terms of fewer void periods and the security of knowing how much income is coming in each month. However, other investors will continue to offer shorter leases to protect themselves against rogue tenants.
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