According to the 2017 English Housing Survey, there has been a 19% increase in the number of 25-44 year olds opting to rent privately, with a subsequent 20% decrease in home ownership over the last decade. This proves how trends in the UK housing market have encouraged the media-driven concept of “generation rent”, where the UK is becoming increasingly dependent on the private letting sector.
In an attempt to offer greater security to occupants, the UK Government has expressed a desire to guarantee longer tenancy agreements, with a three-year minimum housing lease up for debate. Understandably, the news attracted some backlash from landlords and tenants alike. However, the initiative certainly has its advantages, particularly since it offers some much-needed stability in the current political climate, where Brexit is looming and housing ministers are continually changing roles.
Government ministers have argued that the lack of security accompanying short-term rental agreements is unfair since it forces occupants to move neighbourhoods, jobs and schools almost immediately after their contract ends. The purpose of the initiative is to offer renters a sense of security that encourages better engagement with their local community without fear of upheaval at short notice. The initiative would also allow tenants to benefit from secured rental prices without drastic fluctuation and an improvement in credit scores for staying in one place.
However, long-term lettings are not just advantageous for tenants; property owners can also reap the rewards of longevity. A guaranteed income for an extended period, a better relationship with respectful tenants and a higher security deposit are just some of the benefits of long-term tenancy. Furthermore, private renters typically remain in one home for an average of four years, despite 81% signing initial contracts for 12 months or less. Tenants who commit to a property for a long time are also more likely to invest in its upkeep, which is an obvious win for proprietors.
Should this government initiative transpire, landlords will lose the right to issue a ‘section 21 notice of possession’ that gives them the power to evict tenants quickly. This has been perceived as incredibly risky. However, a constant turnover of tenants is likely to involve excessive paperwork, wear and tear within the property, additional cleaning and maintenance fees and potential periods of low income if the property is unoccupied, which is arguably an even higher risk.
In times of political and financial uncertainty, stability and security within the housing market is something to appreciate.