Shelter calls for five-year renting contracts
Shelter is calling for the introduction of a new renting contract which would last five years.
It says the aim is to give greater stability to the growing numbers of people who rent privately.
In a new report, Shelter – which is conducting research into ‘rip-off’ fees charged by letting agents – says the new Stable Rental Contract should become the norm across the rental market in England.
The charity for the homeless insists that the contract would give tenants more stability to put down roots, and landlords more certainty of a good return on their investment, because rents would be increased in line with inflation each year.
The contract would still allow tenants to evict genuinely bad tenants ‘easily’, says Shelter, allow landlords to end the tenancy if they sell up, and give tenants the ability to terminate the contract with a two-month notice period.
Shelter says its research shows that 35% of renting families worry about their landlord ending their contract before they’re ready to move out, with one describing their experience of renting as ‘walking on eggshells’. One in four renters (28%) don’t think a rented home is a suitable place to bring up children.
Two-thirds (66%) say they’d like the option of staying in their home long-term, but the current average stay in a rented home is just 20 months.
The report draws on research by property firm Jones Lang showing that the Stable Rental Contract could increase landlords return on their property investments. The study used economic modelling to find that, compared with the irregular way that some landlords currently increase rents on their properties, their returns would actually be increased with longer-term tenancies and predictable rent rises in line with inflation.â?¨â?¨Shelter says the changes could be introduced immediately within the existing legal framework for private renting in England, without the need for new laws.
However, it is not known what buy-to-let lenders’ views would be on five-year contracts, as the normal insistence is for six-month or one-year Assured Shorthold Tenancies. Nor is it clear how the issue of tenants’ deposits could be handled in the context of a five-year agreement.
Campbell Robb, chief executive of Shelter, said: “With a generation priced out of home ownership, renting is the only choice for growing numbers of people.
“But with the possibility of eviction with just two months’ notice, and constant worries about when the next rent rise will hit, the current rental market isn’t giving people, particularly families, the stability they need to put down roots.
“The Stable Rental Contract offers renters the stability of a five-year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework.
“Turning rented houses into homes should be a priority for everyone who cares about the wellbeing of families in this country, and government must now show the political will to make renting better for millions of people desperate for a stable home they can rely on.
“The Government must pull out all the stops to encourage landlords and letting agents to offer the Stable Rental Contract.
“Last month, ministers set out their plans to commit millions of pounds of public money to underwrite investment in building more rented homes. Insisting that these homes are let using the Stable Rental Contract would be a good place to start.”
But would all tenants welcome a longer rental agreement? See next story.