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 will be between 6-12 months. However, this new proposal puts forward the possibility of a minimum three-year lease in the hope of improving stability for tenants.
These plans have been put out for consultation until the 26th of August, and there are still many details to be discussed, along with some rules and regulations, that would need to be put in place. Still, there are plenty of questions on how this type of change could impact the rental market, and it has understandably caused a bit of a stir amongst landlords and investors.
Longer minimum tenancies would undoubtedly be positive for tenants, who would now have the opportunity to secure a home for a longer period. It will also allow them to settle down with some added 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 larger investors with multiple properties could 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 6 to 12 months long.
Full details on the proposal have not been revealed just yet, but it does mention that it would give tenants the chance to leave before the end of their tenancies.
Secretary of State for Communities, Housing and Local Government 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."
