Former ARLA boss: tenants prefer shorter flexible contracts
The former president of the Association of Residential Letting Agents(ARLA) has slated government proposals to make the standard private rental sector tenancy for three years.
Lucy Morton, who is head of residential agency at JLL , said: “Whilst we welcome the government consulting the lettings sector, the introduction of three-year minimum tenancies is not the right approach to improving the overall rental experience.
“We find that most tenants want flexibility within their contracts for several reasons;
- they might be new to an area or particular development,
- moving in with a partner for the first time,
- planning to expand their family in the near future or,
- for many in the current climate, simply unsure of job security.
“With many companies looking at relocating staff to different office locations and some even making cuts, Brexit is commonly referenced as a very valid reason for requesting a break clause in a contract. As such, we find that tenants, as opposed to landlords, often want the flexibility of a shorter-term tenancy agreement or break clauses.”
She cited a survey of nearly 40,000 tenants carried out by The Deposit Protection Service in 2015 which revealed that an overwhelming 80.1 per cent preferred tenancy agreements that lasted no longer than 12 months.
She said that a review of tenancy renewals in 2018 showed that 75 per cent of their tenants have renewed and the standard is 12 months – some renew for 24 months but only a small handful.
“Additionally, it’s rare for the landlord to serve notice to the tenant,” she added.
“We only see a small minority doing so (approximately seven per cent) and that is usually due to the landlord selling or moving back to the property.”
Morton says that for landlords, shorter term tenancies and break clauses are costly as they have to account for lost rental during void periods, as well as the set-up costs of the new tenancy including rectifying any damage caused, cleaning and inventory check outs.
“All contract lengths are negotiable between the landlord and tenant and contrary to popular belief, there is no standard contract for length of tenure,” she added.
“Where tenants are happy to commit to longer terms, the large majority of landlords are agreeable to inserting rental reviews into the contract, allowing a tenant to plan financially in the longer term and therefore removing uncertainty for them.”