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March 7

by mydeposits
Tenants want five-year tenancies – fact or fiction?

Industry expert Paul Shamplina bring us his thoughts on the proposed five-year tenancies.

A couple of weeks ago, I was invited as a guest on the Eddie Nestor show on BBC Radio London.  The show focused on a proposal from Shelter, the housing and homelessness charity, suggesting private landlords should grant 5-year tenancies.  This came following the results of a YouGov poll which found that one in eight parents in the east and south-east of England blamed frequent and stressful house moves, caused by short rental tenancies, for unsettling their children.

Shelter argues that renters only have a secure home for six months, after which their landlord can ask them to leave with just two months’ notice and without a reason.

Do landlords want longer tenancies?

I speak to a lot of landlords every day and the majority want a reliable tenant who they can trust, who pays the rent on time and looks after their property. In my experience, most landlords say that if after the first 6-12 months’ tenancy everything is going well, they would be happy to offer a longer tenancy.

I presented at a recent ARLA propertymark regional event in Newmarket where David Cox, Managing Director of ARLA was talking about longer tenancies.  He asked the 75 letting agents in the room “How many of your tenants have requested that the landlord offers them a longer tenancy agreement?”.  Only one letting agent raised their hand.

With soaring house prices meaning more families are renting than ever before, I don’t disagree that there are some tenants looking for the security of longer tenancies.  I know many landlords who don’t increase rents and will sometimes even reduce it, just so they can keep their tenant happy, once they have proved to be reliable.  It helps the landlord save on letting fees and refurbishment costs, as well avoiding void periods.

So what about Shelter’s proposal?

The problem with Shelter’s proposal is that not all landlords have embarked on buy-to-let as a long-term pension pot strategy.  Some are using the rent as a gap filler for a couple of years or have become accidental landlords through personal circumstances.

Families looking for the security of a longer tenancy need to try and qualify the landlord’s long-term buy-to-let strategy, just as landlords who wish to keep hold of their property for a long-time may seek tenants looking to stay put.  Of course, that is easier said than done, as tenants are driven by the property itself, not the landlord they rent from.  But, in my opinion, making 5-year tenancies mandatory is not the answer.  Yes, the government needs to try and encourage longer tenancies, but it still comes down to building relationships, having good open communication and developing a trust between the tenant and the landlord.

Is there an immediate solution?

The government White Paper on housing highlights the need to build 250,000 homes a year to keep up with demand, especially because of soaring house prices, expensive rents, lack of affordable ownership and the ever growing population.

With more people renting than ever, what the Private Rented Sector needs is flexibility and recognition that different types of tenants and landlords look for different things when renting.

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