A minimum tenancy term of three years would be introduced by the government to give people renting homes in England more security.
The government proposal comes after a meticulous research that shows 80% of tenants currently have contracts of six or 12 months. Do this situation foster insecurity for the future and financial uncertainty? The government seems to think so, this is why they are thinking of proposing longer tenancy agreements as a solution.
The new measure could mean more financial security for landlords and provide a stronger initiative for tenants to put down more roots. In the long run, extended tenancies could also enhance local economies around the UK and revive the interest for many neglected small towns. Under the new plans, exemptions will be applying to student accommodation and other short-stay services.
According to the figures, tenants stay at the same property for an average of four years however they have shorter contracts. Contract renewals help tenants stay at their home for more than the agreed tenancy period.
Short tenancy periods have been the main driver of homelessness according to Polly Neate, Chief Executive of housing charity Shelter.
A recent analysis from the BBC shows that home ownership in the UK has dropped 10% since last year. Because of this, rental demand is rising in every part of the UK. In the last 10 years, private tenants between the ages of 35-54 have nearly doubled.
Besides the housing crisis in the UK that prevents people from climbing the property ladder, renting is often the most flexible and affordable housing option for many Brits. The lifestyle freedom of renting property will never lose its appeal as people from all over the world move to the UK and especially to London.
If a new minimum tenancy period is to be proposed, then a middle ground has to be found in order for both sides, landlords and tenants, to benefit from the new law.