A minimum tenancy term of three years for privately rented homes is being considered by the Government as a way of giving people greater security in the fastest growing sector of the housing market.

A consultation exercise on the minimum tenancy term will now run until the end of the August. Most private tenants currently have contracts of six or 12 months and Ministers say longer agreements would allow them to put down roots in local communities. Tenants would also be able to leave early under the new plans while landlords would get more financial security. However, the proposal has been attacked as not being fit for purpose by both the Labour Party and a major landlords group. The National Landlords Association derided it as a throwback to an earlier, over-regulated time that fails to address the needs for a more flexible system. Meanwhile opposition housing spokesman 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.” He said Labour’s plans included caps on rent rises, an end to no-fault evictions and protection against substandard properties. NLA Chief Executive Officer Richard Lambert said: “We would accept that the flexibility of the current Assured Shorthold Tenancy isn’t used as effectively as it could be, and that we should be looking to find ways to ensure that tenants are offered the kind of tenancies they need at the time they need them. He added “That means thinking about how to modernise a model devised 30 years ago, to take account of the changes in the people who are renting and the way they live their lives.” Mr Lambert accused the Government of having misled private landlords over the proposals in the past couple of years.

Short notice

Official figures show approximately 20 per cent of all households live in the private rented sector, double the figure it was 20 years ago. Renters stay in a property for an average of four years but most have shorter contracts, typically just six months under the assured shorthold tenancy model. These can be ended by landlords at very short notice, often without giving a reason. Exemptions to the new rules could apply to certain types of tenancy, such as for students who usually want accommodation for between nine months and two years, linked to college and university academic years. If approved, the new longer tenancies would bridge some of the gap in security of tenure between privately rented properties and council homes. Two years ago the Government ended the practice of lifetime tenancies being granted to council tenants, with fixed term tenancies of between two and five years (or up to ten years where young children are involved) now being the norm for new council tenants. Announcing the consultation, Housing Secretary 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.” Mr Lambert said NLA research finds consistently that around 40 per cent of tenants want longer tenancies, but a similar number do not. More than 50 per cent of tenants consistently say they are happy with the tenancy length they were offered, and 20 per cent say that when they asked for a longer tenancy, they got it. It is feared the proposals could have a negative impact on the buy-to-let sector, which is already showing signs of stress following changes in the tax system and a proposed ban on fees which have encouraged many smaller landlords to sell some or all of their properties. It may also encourage lenders to increase interest rates or impose other conditions to compensate for landlords having less flexibility over disposing of properties.