6 Sep

Three-year tenancy proposal: what this could mean for you

Three-year tenancy proposal: what this could mean for you

The consultation on the government’s proposal of minimum-term tenancies came to an end last recently, with many landlords left wondering of the outcome.

The official consultation had been triggered by the government saying that 80% of tenants currently have contracts of 6 or 12 months, but many want longer tenancies, with Housing Secretary James Brokenshire claiming this to be unfair - particularly for families with schoolchildren who may be required to uproot due to the terms of their tenancy.

The proposals suggested a 3-year tenancy as standard, with a 6-month break clause, with the intention that this would stop landlords from ‘forcing’ tenants out at short notice. The minimum 3-year contract would allow them to walk away earlier if they wish, and with greater protection if they wanted to stay in a property for an extended period of time.

The consultation was to examine whether there should be exemptions from the three-year rule for student accommodation, where tenancies are tied to the academic year.

About 80% of tenancies in England and Wales are set at 6 months or 12 months, with the assured shorthold tenancy undoubtedly the foundation of the buy-to-let industry.

Should the proposal be enforced, this would undoubtedly change the dynamic of letting property in the UK.

David Powell, Operations Director of Berrymans said of the proposal: “whilst I hope the government give plenty more thought to this proposal, for the majority of tenancies, not much will change an awful lot given the extended length that tenants now seem to occupy properties.  For the landlord there is also comfort that the tenant is looking to commit for a longer period and potentially having to provide longer notice periods.  I feel the government have overlooked how agents/landlords view tenants, and the current proposal may have an impact on older tenants who may only have a short time to retirement”.

The English Housing Survey, published in January this year, found that 46% of 25-34-year-olds now live in private rentals, compared with 27% in 2006-07.

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