When it comes to helping people in the rental sector, a balancing act needs to be undertaken. There is a need to help tenants and landlords, because providing support for one group may cause damage to the other sector. Quite often there are decisions made that only support one group or area of the market, but there is hope that an increase in three-year tenancy agreements will be of benefit to tenants and landlords.
The push to offer more three-year tenancy agreements is just one way that the Government is looking to impact on the rental sector. There have also been movements to improve affordability within the rental sector, which is something that will fall under the Build To Rent scheme. There is a desire to make renting more “family friendly” and more affordable.
Steps are being taken to help people in the market
It appears as though there is a willingness to at least try these measures. The British Property Federation, the BPF, states that 20 major developers and investors who operate in the Build To Rent sector have agreed to work towards these Government recommendations. There has also been the move by Santander which has seen them extend their assured shorthold tenancy (AST) policy to a period of 36 months.
This move will hopefully provide security for tenants, allowing them to budget further in advance. The threat of rent increases can often see families fail to put down roots, which can be damaging for them and particularly the children. There is a great deal to be said for a settled home life, and if children can stay in the same home, they can stay in the same school. This provides consistency in their education and it hopefully helps them to maintain friendships. These are huge aspects in life for people, and knowing that they can stay in a home for longer without worrying about rent increases will hopefully help tenants to make more out of life.
Landlords can benefit from these changes too
Some people will say that limiting a landlord’s ability to raise rent is a bad thing for them, but there are positive aspects to consider too. With longer rental periods in place, the likelihood of void periods is reduced, which is great news for landlords. There is no income generated during a void period and when a landlord must find a new tenant, they have to carry out work and spend money. By having a tenant in place for longer, there is less work for a landlord to do, allowing them to focus on other matters.
It is clear that the rental market in the UK has evolved in recent years and it is different from what the rental market used to be. It is a far more important sector with respect to volume than it has been for many years, and this is likely to be the case for many years to come. It is therefore important that steps are taken to offer benefits and help to tenants and landlords.
If you are involved in the rental sector and would like assistance or guidance on what to do next, come and speak to Geoffrey Matthew. We are always on hand to help and we look forward to assisting you soon, no matter what you need in this area.