Longer tenancies have been in the news lately, with some build-to-rent providers offering tenants the option of a three-year contract instead of the standard six month or one year AST. The government picked up on the trend and recently consulted on the idea that all landlords offer longer rental periods to tenants. But is there really a demand in the market for longer contracts?
Some tenants say they would welcome the move, especially if they have children in local schools and an easy commute to work – after all, who needs the disruption of moving if they don’t have to? Others, particularly younger people with no family commitments, often prefer the flexibility of being able to move around without being tied into a long rental agreement.
According to AXA, six out of 10 renters are happy with tenancies of 12 months or less. A survey carried out by the insurer reveals that more than two thirds of tenants would still opt for a shorter tenancy even if they were given the choice. However, according to the survey, long leases such as those commonly used in mainland Europe, would be attractive to a quarter of renting families as opposed to single renters and those without children.
A recent poll of 2,000 tenants by online letting agent MakeUrMove also found that only 7.2% of tenants would prefer a tenancy lasting three years. Around a third of those polled said they would like tenancies to remain at 12 months and a further 20% would like tenancies to last no longer than two years.
So three years doesn’t seem a particularly popular choice. However, some 29% of tenants did say they would prefer a tenancy to last significantly longer than three years. Over two in five surveyed (43%) had already spent more than five years in their current rental property.
Ultimately, it seems that the government’s Tenant Fees Bill, now making its way through Parliament is a far more popular proposition than multi-year leases. Six in ten renters say they have had to pay the types of fees to landlords and letting agents that the Bill seeks to outlaw, says AXA. These are mostly fees for starting, ending or renewing a tenancy agreement. And a quarter of tenants say they have had to pay for the pleasure of having a credit or reference check done against them too.