Opinion: there's a strong case for three-year tenancies

This writer (and landlord) says we need longer tenancies to protect renters and improve the reputation of landlords.

There’s strong speculation that three-year tenancies could be introduced within the next few days and some landlords are worried. Not me.

A report in The Sun claimed that the government could be set to announce a decision this week, despite the consultation on longer tenancies continuing until August 26^th.

Government data shows that people stay in their rented homes for an average of nearly four years, yet 81% of rental contracts are assured shorthold tenancies with a minimum fixed term of just six or 12 months.

The Ministry of Housing, Communities & Local Government says this can lead to tenants feeling insecure, unable to challenge poor property standards for fear of tenancies being terminated, and unable to plan for their future or contribute to their wider community.

Speaking last month, the Secretary of State James 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.”

Read our guide to cutting your costs as a buy-to-let landlord

Three years beats one

Clearly, these measures would need to be carefully thought through to avoid unexpected negative consequences.

Landlords who have a real need to do so should probably still be able to sell their properties – although perhaps with protections for sitting tenants.

And tenants should not be trapped by three-year agreements; they should be able to exit if they have good reason to. This would need be a measure to empower tenants not trap them.

But giving tenants the chance to feel secure in their homes and to establish roots is essential if we’re going to rely so heavily on rented accommodation as a society.

I should point out that these are not the views of a serial tenant, either. I’ve been a landlord for six years and I recognise that for both moral and practical reasons we need to provide greater stability and protection for the people who call our investments home.

There’s no place like home

I’m a landlord, albeit an accidental one, and I am wholeheartedly behind extending the length of minimum tenancies to favour the tenant.

Our rental property was our first home but negative equity and a sluggish local market meant we couldn’t sell it without crystallising a considerable loss.

So we moved on but kept it, getting consent to lease initially but then making overpayments until we had enough equity to remortgage onto a proper buy-to-let deal and feel like proper landlords.

We’ve never asked tenants to leave and, barring some sort of financial disaster, never would.

The couple who live there just now are fully settled. They have painted and decorated, they have transformed the garden into a tranquil space filled with flowers (far cry from the moon landscape it was when I lived there) and they have adopted two cats that they would no doubt struggle to get permission to move to a new tenancy.

It’s their home just as much as it used to be ours, but they have only been able to put down those roots because we told them frankly at the beginning that we would not end the agreement unless and until they wanted to.

But that’s not a legal pledge. I’m so pleased they have felt able to treat their home as their home rather than as a house they might only rent for a year before moving on. However, they only have my word for it that they have that security.

While I obviously can’t speak for my particular tenants, I know that I would only feel able to invest so much effort into my home if I knew I was going to stay there for the long term - the same security homeowners and those in social housing enjoy. Under our current system, tenants have no such protection.

I believe strongly that they should be able to send their children to school, plant flowers and watch them come back each year, style their homes in the way they want to, all without wondering if they will be there for the rest of the year or for as many years as they need.

Why the death of the first time landlord has been greatly exaggerated  

Good for landlords

Clearly, a lot of landlords are very unhappy about the proposals and there have been a lot of news stories where they express their concerns.

The Residential Landlords Association has said that it actually supports longer tenancies but does not what them to be imposed as the norm.

Instead, it suggests that financial incentives such as tax relief would be a good way to encourage landlords to offer such tenancy agreements.

I do believe that we need a strong and flourishing private rented sector to provide homes for people who need to move around the country or who cannot or will not buy. Perhaps that means tax breaks are necessary to incentivise ethical behaviour.

Currently, it's all too easy to paint landlords as baddies just now; as wealthy, arrogant people who evict innocent tenants so they can install new ones at a higher rent.

Who chuck families out of their homes because they decide to sell up for comparatively insignificant reasons. Who evict tenants who ask for minor repairs.

I don’t think that’s an accurate description of the vast majority of landlords but if we want to stop being the baddies in a tight housing market then we should not stand in the way of reforms that make the system fairer to tenants.

Happier tenants will mean there’s less pressure on the government to penalise and punish landlords. And happier tenants who feel secure in their homes means less work for landlords. Best of all, it means they can feel confident that their property investment isn’t coming at a cost to someone else.

As a landlord who spent many years as a tenant, it’s just obvious we need to improve life for tenants.

Everyone deserves to feel secure in their home and if longer tenancies are how we achieve that then sign me up.