Shelter has been tirelessly campaigning for longer tenancies for the last few years. The charity has led the case for change and proposed a five-year Stable Rental Contract – something they believe will offer long-term renters the stability they need in their home.
But is it something renters actually want?
When we talk about longer tenancies, many will immediately think of being locked into a long-term contract, unable to then move if they wish to start a family, or relocate for a new job.
Shelter’s proposed Stable Rental Contract however states it will simply give tenants the guaranteed option of staying in a home for five years, if they wanted to, with year-on-year rent increases in line with inflation.
They argue that this type of long-term tenancy is an absolute necessity, but The Deposit Protection Service has recently released survey results revealing that 8 out of 10 tenants want tenancies of a year or less. In addition to that, a huge majority of the tenants surveyed (70%) also said that they preferred a rolling contract of 1 or 2 months’ notice at the end of their tenancy, rather than a new fixed-term contract, which was favoured by just 28%.
We like to take an analytical approach here at Portico, so we decided to do a little research of our own. We looked at the average Portico London rental tenancy length today and compared it with the average Portico London rental tenancy length 8 years ago.
Interestingly, we found that that 8 years ago the average London rental tenancy was about 20 months’ long, today in 2016, the average London rental tenancy is 28 months’ long.
So what’s going on? Do tenants really want longer tenancies? If they don’t, why are we seeing tenancy lengths in London increase?
I personally don’t believe that tenants – especially London tenants – want longer tenancies. I don’t think the majority feel unstable, worried about being turfed out by their landlord. And I also don’t think that the majority would benefit from a contract based on rent increases in line with inflation. Instead, I think tenants prefer short-term contracts, but are being forced to renew their contracts due to the rising cost of house prices.
Renters like the flexibility offered by renting, and by their tenancy agreement. They like the fact they can pack up and go if their job changes, or if they decide to move in with someone else. And this is not just the case for the younger generation of renters, but also the silver haired renters – a tenant type that is definitely on the rise. Renters want flexibility and short-term contracts because ultimately they see renting as a short-term situation on the route to home ownership.
Fixing a five-year rental contract isn’t a goal like getting on the property ladder is, but unfortunately buying a house in London is becoming increasingly unrealistic. We’re a nation of house buyers living in generation rent, and it’s for this reason that the majority of tenants simply aren’t prepared to give up hope and commit to a long-term rental contract.
Do I think the majority of tenants want to be renting in 5 years’ time? No. But do I think tenants really want longer tenancies? Not at all.
Robert Nichols is Managing Director of London estate agency Portico, with branches in Acton, Battersea, Bloomsbury, Camden, Clapham, Dulwich, Fulham, Hammersmith, Highbury, Islington and West Hampstead.