Three year tenancy Central Housing Group

Now isn’t the time to introduce three year tenancy

The Association of Residential Letting Agents has released details of its response to the government’s official consultation on a possible three year tenancy in the private rental sector – and ARLA says now is not the time to introduce such a change.

The consultation which formally closed in late August invited views and comments on the benefits and barriers of landlords offering longer tenancies in England.

In ARLA’s response, outlined on the association’s website, it argues that the idea of a three-year tenancy with a six-month break clause is unworkable, for three reasons.

“Firstly, they will reduce flexibility and control for tenants. Secondly, the proposals will not provide parity for both tenants and landlords. Thirdly, automatic rent increases will likely cost tenants more money” says ARLA.

“The main barrier to landlords offering longer-term tenancies is that demand for this type of tenancy is low. The other main barriers are the time taken to gain possession of property, and mortgage conditions. In addition, letting agents want well-maintained tenancies as void periods and renewals reduce agent’s fees” explains the association.

It also advocates that the maximum restriction should limit rent increases to once per year as is currently the case under Section 13 of the Housing Act 1988.

Further restrictions are unnecessary, ARLA says, because in some cases rent rises capped in line with inflation would actually be greater than the current level of rent increases, while landlords should have the right to increase rents if they have to in order to cover the increasing costs of operating a property to let.

However, ARLA says financial incentives to encourage landlords to offer longer tenancies may be acceptable.

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