UK tenants to get minimum three-year contracts

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

A row of houses to rent in Birmingham
(Image credit: Christopher Furlong/Getty Images)

UK tenants are to be guaranteed minimum three-year contracts under government proposals intended to give renters more security.

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.

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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.

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