The government has proposed the introduction of a three-year minimum lease for property rentals, to protect renters from being evicted at short notice by landlords. According to government data, people stay in their rented homes for almost four years – but 81% of rental contracts last for just six to 12 months.
The new minimum-term proposal – which must now pass through eight weeks of consultation before potentially becoming law – comes from James Brokenshire, the secretary of state for communities and housing.
Under the new scheme tenants would still be able to exit a lease agreement if needed – due to a change of personal circumstances or the end of term at university, for example – and there would be a six-month break clause.
“It is deeply unfair when renters are forced to uproot their lives or find new schools for their children at short notice due to the terms of their rental contract,” Brokenshire said. “Being able to call your rental property your home is vital to putting down roots and building stronger communities. That’s why I am determined to act, bringing in longer tenancies which will bring benefits to tenants and landlords alike.”
Labour’s shadow housing secretary, John Healey, said: “Any fresh help for renters is welcome, but this latest promise is meaningless if landlords can still force tenants out by hiking up the rent. That’s why Labour’s new rights for renters includes controls on rents as well as an end to no-fault evictions and protection against substandard rented homes.”
The proposal, along with some other suggested changes, will now be consulted on for eight weeks. Parliament is seeking views from landlords, tenants, and related organisations on the best ways to provide longer-term security for renters.
Also working through parliament at the moment is the Tenant Fees Bill, which would put restrictions on estate agent fees and limit deposits to no more than six weeks of rent. Generally, the aim of the bill is to make renting more affordable – it would save tenants around £240 million per year, the government says – and to make rental fees and charges more transparent.
This morning, accounting firm Moore Stephens said that 150 high street estate agents closed down last year and 7,000 are ‘showing signs of financial distress’. Last week, Countrywide – the UK’s largest estate agent group – saw 30% of its stock value wiped out as it issued a second profit warning in six months. The Tenancy Fees Bill, which could make it into law by spring 2019, could be the nail in the coffin for some of those 7,000 agencies.