UK tenants to get minimum three-year contracts

Government plans

Government plans would give renters more
security, but Labour claims they do not go far enough

One-Minute Read

About 80% of tenancies in England and Wales are set at six
months to a year, leaving many at risk of being evicted at short
notice and without an explanation from the landlord.

As part of a consultation paper published today by Communities
Secretary James Brokenshire, landlords would be forced to offer
three-year contracts with renters free to leave before if they
want. The government is, however, looking at exemptions such as for
student accommodation.

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”, and said longer
tenancies were “vital to putting down roots and building stronger
communities”.

According to the English House Survey, the number of 25-34
year-olds privately renting has almost doubled since the financial
crisis, to 46%. Official figures show renters stay in a properties
for an average of four years but most have shorter contracts.

The government claims the measures will offer benefits to both
parties, with tenants able to leave earlier under the plans while
landlords would get more financial security, reports the BBC.

While welcoming extra help for renters, Labour said the
proposals did not go far enough.

Shadow housing secretary John Healy, said longer tenancies were
“meaningless if landlords can still force tenants out by hiking up
the rent”.

He said a Labour government would push for new rights for
renters including controls on rents, an end to no-fault evictions
and protection against substandard rented homes.

This view was echoed by Polly Neate, chief executive of housing
charity Shelter, who said loss of tenancy was “the main driver of
homelessness” and called for the government to “go beyond three
years”.

Longer tenancies could also have “a dramatic impact on the
buy-to-let industry, which took off after the introduction of the
assured shorthold tenancy”, says The Guardian.

At present many lenders grant riskier buy-to-let mortgages on
the assumption they can repossess properties at short
notice. However, three-year minimum contracts would make banks
and building societies wearier of granting loans, or raise interest
rates to reflect the additional risk.