Compulsory three year tenancies could deter a third of landlords
Almost one third of landlords (32%) would be less likely to buy new rental property if the government were to introduce compulsory or default three-year tenancies, Paragon’s latest PRS Trends research has found.
Asked if the introduction of a compulsory three-year tenancy would make them more or less likely to consider certain tenant types, the highest proportion of landlords said they would be more likely to consider older couples (36%), retired people (29%), families (25%) and older singles (25%).
John Heron, director of mortgages at Paragon, said: “Landlords are highlighting that the diversity of the tenant population calls for a diversity of tenancy arrangements. While some groups value greater security, many other tenants favour flexibility.
“Young professionals, for example, value the flexibility that the PRS brings to move to different areas and to different types or property.
“In light of these findings, rather than impose longer-term tenancies as the primary or default arrangement in law, it may be preferable to bolster tenants’ rights to choose from a range of different tenancy lengths and boost incentives to landlords to enter long term arrangements where requested.”
Interestingly, landlords felt a compulsory three-year agreement could potentially make them less likely to consider mobile and itinerant groups, including students (45%), migrant workers (40%) and young singles (24%).
Paragon has consistently supported greater security for tenants who desire it and was one of the first lenders to update its mortgage conditions to facilitate longer term tenancies back in 2014.