Landlord and Tenant Law - New 3 Year Tenancies a Possibility

Published: 20/07/2018

Tenants who rent property at the moment are normally asked to sign tenancy agreements for a six month or one-year period.

However, plans are afoot to extend the minimum tenancy to three years. The government aim to talk about this new rule in August. MP’s who support the proposals say the new 3-year term will give tenants more security. 

They say that this would allow people to put down roots and give them the opportunity to settle into an area rather than having to move around constantly. The changes won’t affect tenants that need short-term accommodation such as students.

However, Landlords might not feel the same way. At the moment if a landlord has problems with a tenant they can ask them to leave after six months. This is done by giving them a Section 21 notice. The Section 21 notice gives tenants 2 months to leave the premises and it is used in assured shorthold tenancies.

However, the Section 21 notice which can be given by a landlord without a reason, isn’t popular. Certain bodies say it is better to abolish this law to provide protection for tenants, rather than extend tenancies to 3 years. 

Many landlords believe that a 3-year contract with 6 month break clauses will make it more difficult to evict problem tenants. It will also affect people who want to rent out their homes for a short period. Some homeowners let out their properties when they relocate temporarily for work and don’t want to leave their homes empty.

The National Landlords Association (NLA) did some research with tenants and found that the majority of people were happy with the length of their tenancies. 20% reported that they had asked for a longer tenancy and it had been agreed.

Mortgages are another consideration. Currently lenders of buy to let mortgages stipulate that any one tenancy agreement must be for a maximum of 12 months. If the 3-year tenancy is agreed, mortgage companies will need to change their criteria for lending. If they don’t it will mean that many landlords won’t be able to finance or re-finance a buy to let property.

The availability of rental property on a longer lease has been welcomed by organisations such as Shelter. Their Chief Executive, Polly Neate, told the Daily Express newspaper that it was an important step forward. Because she said,” the loss of a tenancy is the ‘main driver of homelessness”.