6^th Jul 2018

Private rented sector landlords are outraged by the government's intention of making it mandatory for them to give tenants a minimum three year tenancy term, but tenants will be able leave the property any time within that period if they want to.

The housing, communities and local government secretary, James Brokenshire, is the man responsible for the proposal contained in his consultation paper which was published on Monday 2nd July; the reasoning behind this is to stop tenants being forced leave at short notice.

According to the department around 80% of tenants living in England and Wales have six months or one year tenancies as assured shorthold tenancies are common practise within the sector.

Brokenshire firmly believes that under these terms tenants on the whole can be evicted at short notice without landlords having to explain their actions.

The consultation will look at whether student leases should or should not be included in the three year rule as the tenancies are usually defined by the academic year.

James 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.”

In his proposals for a longer tenancy agreement, tenants would be free to leave before the end of contract, but they will also be given the legal right to extend their period of stay in a property.

A trade association has branded the proposal as a highly political move to encourage new voters into their party fold; it claims that many renters do not want longer tenancies as 6 out of 10 are happy as it is.

A spokesperson for the trade association, said: “This is a policy which the Conservatives derided when it was put forward by their opponents in the past two general election campaigns. 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.”

The association carried out a survey with tenants and claims that only 40% want longer tenancies, over 50% are happy with their tenancy agreement period and 40% do not want a longer term. The research also found that 20% of tenants had their tenancy extended upon submitting a request.

The government's overall concern is for families living in rented accommodation under short term tenancy agreements that are unable to provide a stable home environment constantly whilst their children are growing up.

The chief executive of the housing charity Shelter, Polly Neate, said: “This is an important step forward. Losing a tenancy is the main driver of homelessness and also causes huge instability for renting families, so everyone who rents will be very pleased to see a move towards longer tenancies.

“But if the government really wants to stand up for renters, they should provide real protection from eviction, and the huge upheaval of having to move home, jobs and schools.”

Labour's shadow housing secretary, John Healey criticised the proposal as not doing enough and the party still wants a rents cap to be imposed.

Healey said: “That’s why Labour’s new rights for renters include controls on rents as well as an end to no-fault evictions and protection against substandard rented homes.”

What the government hasn't taken into account with the proposals is it could cause major problems to the buy to let sector, as it grew significantly because of the advent of the assured shorthold tenancy. Lenders were more confident to grant BTL mortgages but the three year term could prove to be a major stumbling block for new BTL applications, or they may even increase the interest rate as a 'protection factor'.

The longer term agreement will be the most important part of the eight week consultation.

The government said: “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.”

News Archive »