3 Year Tenancy Agreements

Three-year leases will not help landlords who want to evict a bad tenant, and it could be more difficult if they apply for a BTL mortgage, as the six-month trial period can discourage lenders from a three-year lease term. We found that the majority of tenants initially want shorter tenancy contracts – 6 or 12 months that last indefinitely. Over the past 12 months, we have asked for 3 maybe 4 tenants of longer rental contracts for real estate (usually larger 3/4 bedroom houses than families) who like to accommodate homeowners. One of our owners first makes a 6-month contract on all his real estate, which then overflows. In the 14 years we have had his portfolio, he has served only Section 8 of communications for rent arrears a few times, not even a section 21. “Even in cases where tenants do not comply with the terms of the tenancy agreement, the landlord must be taken into account.” The government hoped, by offering private tenants three-year leases that would give them more security so they could take root; However, many homeowners think this will cause them even more problems. Dan Wilson Craw, director of Generation Rent, said it was time for the 30-year-old rental rules to be revised. However, a recent study of an online landlord showed that a large majority of tenants with 12-month contracts and are not satisfied with the introduction of three-year leases. BM Solutions also allows a three-year AST.

Andrew Montlake, director of broker Coreco, said: “In my experience, there are many homeowners who would like to have longer rental lengths for their good tenants, but who are bound by the requirements of mortgage lenders, who traditionally don`t like more than a year AST. But the tenants` demand is not there for a three-year contract, according to Carla Sateriale, mortgage manager at UK Finance. I firmly believe that the government needs to look carefully at the different needs of tenants in the UNITED Kingdom and that it does not need to make quick decisions on the basis of insufficient research, which is essential so as not to further harm our sector, which is already affected by legislative changes for landlords and brokers and which will make dramatic changes next year with the removal of rental fees. Simon Heawood, CEO of an online real estate investment platform, called the government`s alleged decision to implement three-year leases a “confused government turnaround.” The proposals could have dramatic consequences for the buy-to-the-market industry, which arrived after the introduction of guaranteed short-term rent in the years. The six-year and one-year contracts gave lenders the confidence to grant mortgages against real estate they knew they could reclaim short-term property if necessary. But a three-year term should make lenders cautious when granting loans, or they can raise the interest rate to reflect the additional risk. However, Mr. Whittaker cautioned that the circumstances under which landlords may be laid off should be examined and suggested that there would be a clause to be written in the rent increase each year in line with inflation. A study by the National Landlords Association earlier this year found that 19% of homeowners planned to sell one or more of their properties next year. This group is less likely to want to be locked into a lease for three years, and it is certain that the proposal could lead to amateur renters leaving the sector when it comes into force. The consultation examines whether exemptions should be granted to the three-year rule for student housing where rents are linked to the academic year.

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