Landlords have reacted furiously to government proposals that will give tenants a minimum three year contract – but allow them to walk away earlier if they wish.
The longer tenancies, proposed by the housing, communities and local government secretary, James Brokenshire, in a consultation paper to be published on Monday, would stop landlords forcing tenants out at short notice.
About 80% of tenancies in England and Wales are set at six months or 12 months, with the assured shorthold tenancy the bedrock of the buy-to-let industry.
The current contracts leave tenants at risk of eviction at short notice, without the landlord having to give an explanation.
The consultation will examine whether there should be exemptions from the three-year rule for student accommodation, where tenancies are tied to the academic year.
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.”
Under the proposed longer-term agreement, tenants would be able to leave before the end of the minimum term, but would have greater protection if they wanted to stay in a property for an extended period of time.
But the National Landlords Association (NLA) said only four out of 10 tenants actually want longer contracts, describing the proposal as a vote-grabbing ”political move”.
Richard Lambert, chief executive of the NLA, 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.”
NLA research with tenants found that 40% of tenants want longer tenancies, but 40% do not. More than 50% said they are happy with the tenancy length they were offered, and 20% told the NLA that when they asked for a longer tenancy, they got it.
Behind the government’s proposals lie growing concern about the number of families that face bringing up children in short-term rental accommodation.
Polly Neate, the chief executive of housing charity Shelter, 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 said the plans do not go far enough, and that tenants need caps on rents.
The shadow housing secretary, John Healey, said: “Any fresh help for renters is welcome, but this latest promise is meaningless if landlords can still force tenants out by hiking up the rent.
“That’s why Labour’s new rights for renters includes controls on rents as well as an end to no-fault evictions and protection against substandard rented homes.”
The proposals could have a dramatic impact on the buy-to-let industry, which took off after the introduction of the assured shorthold tenancy. The six-month and one-year contracts gave lenders the confidence to grant mortgages against properties where they knew they could repossess the property at short notice if necessary. But a three-year term is likely to make lenders wary about granting loans, or they may increase the interest rate to reflect the additional risk.
The proposals on long-term tenancies will form the key part of an eight-week consultation.
“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,” the government said.
The English Housing Survey, published in January, found that 46% of 25-34-year-olds now live in private rentals, compared with 27% in 2006-07. In London, private renting is now the most common form of tenure.
Home ownership levels peaked in the early 2000s, at 71% of households, but have fallen to a steady 63% in recent years.
Landlords react with fury to three-year tenancy plans | Money | The … – The Guardian