In an effort to make renting a viable long-term option for thousands of people, the Government have proposed a three-year tenancy agreement.
Historically, the standard lease for renting a home would fall into the range of 6-12 months long, however, this new proposal puts forward the possibility of a minimum three-year lease in the hope of improving stability for tenants.
While this proposal has been put out for consultation until the 26th of August, it has understandably caused a bit of a stir amongst landlords and investors.
There are still many details to be discussed along with some rules and regulations that would need to be put in place, but it does raise plenty of questions on how this type of change could impact the rental market.
Longer minimum tenancies would undoubtedly be a positive for tenants, who would now have the opportunity to secure a home for a longer period allowing them to settle down with some extra security and potentially avoid any costs that come with moving into and renting a new home.
As for landlords, the change could be a benefit depending on their portfolio. It is expected that small-scale landlords may not like the idea of being tied down for a longer period, whereas some of the larger investors with multiple properties would welcome the new rules for more financial security.
The Government’s data revealed that on average, most tenants rent a home for just under four years, while the vast majority of rental contracts (81%) are six to 12 months long.
All of the details have not been revealed just yet, but the proposal does mention that it would give tenants the chance to leave before the end of the tenancy.
Secretary of State for Communities – James Brokenshire – commented on the proposal and the motivation for putting it forward “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.”