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Government Proposals for Longer Tenancies

In recent years the government has shown particular attention to the looming housing crises.  Figures show home ownership has dropped from 72% a decade ago to 63% last year. In addition, the proportion of 35 to 54 year olds who live as private tenants has nearly doubled in 10 years.

The lack of affordable housing and soaring house prices has resulted in individuals being unable to get on to the housing ladder and instead are forced to rent accommodation on a long term basis.

As part of the government’s new measures in tackling the issue at hand, it has set up a consultation on the “minimum tenancy term”.

The intention is to give tenants greater security in rented property, increasing the standard tenancy period of 6 or 12 months up to 3 three years and possibly beyond.  The longer agreements according to ministers, will give tenants a chance to put down their roots and build stronger communities while giving Landlords financial security for a longer period.

However, the new proposals haven’t been welcomed by everyone. Some tenants argue that shorter agreements give them greater flexibility, therefore the new proposals will keep them tied down.

Landlords would also find it more difficult to finance their properties and could end up paying higher interest rates to lenders.

On the other hand, some argue the proposals don’t go far enough as landlords adamant on removing tenants could still get around the longer tenancy agreements by increasing rent and forcing tenants to move.

Whatever the consultation agrees upon, it is sure to cause more than a few unhappy landlords and tenants alike.

To discuss how this could affect your properties please contact our commercial property team on 01527 912912 or email maqadas.ali@thomasguise.co.uk

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