Need for more long-term tenancy agreements

Permalink: Need for more long-term tenancy agreements
by Lin Freestone

There has been a call for the introduction of more long-term tenancy agreements to bring the UK in line with the Continent where such practice is commonplace.

In France the rental market is highly developed and long-term tenancy is a well-proven and well-used option for tenants who wish to organise their financial affairs in this way.

The chief executive of Belvoir, the UK’s largest specialist lettings agency, has appeared on the BBC2 Money Programme to explain how tenants and landlords could benefit from the security of long-term tenure. Mike Goddard said it needs to be recognised that renting can be a financially viable and sensible lifestyle choice.

The Money Programme predicted that by 2010 up to two million people could be in negative equity and more people than ever are becoming landlords and tenants. This has come about as the average UK house price has plummeted by £15,000, new mortgage approvals have dropped by 95% and the number of houses sold is at a 30-year low.

Mike Goddard said that the days when renting was viewed as a second rate option are fast disappearing, as is the stigma of being a tenant. We are now seeing the first stage in a fundamental shift in attitude by the British public toward homeownership and renting. It is evident that more tenants want increased security of tenure in where they live, and this is not readily available within the current legal framework of the Housing Act.

He believes that in the UK we will gradually move towards a similar situation; short-hold tenancy will not be the only option and long-term tenancies will become readily available. This will give the tenant more rights and more security.

The Money Programme outlined the completely different attitude to renting property in France, where even before the credit crunch mortgages were notoriously difficult to obtain. Three-year leases are standard, often increasing to nine years, and tax incentives are available to people renovating property for the rental market. Although tenants have more rights, they accept responsibility for repairs and maintenance.

This is a fundamental incentive to long-term tenancy, according to Mike Goddard. He feels a landlord would be unwilling to give long-term tenancy unless there was an agreement that the tenant would take responsibility for some of the costs. Equally, tenants need the security of knowing they can live in the property long enough to benefit from any money they have invested.