That’s the view of easyProperty CEO, Rob Ellice, writing for property industry journal Property Week, where he argues strongly against Labour’s longer tenancies proposals.
Ellis says that unless some sort of flexible exemptions are incorporated into Labour’s proposals for the private-rented sector (PRS), “it is difficult to see how a longer minimum tenancy requirement would work with landlords as well as benefiting many tenant demographics.”
Labour are proposing a standard tenancy minimum length of 3 years (the Greens have said 5 years), but this is at odds with current buy-to-let mortgage rules, most of which contain restrictions on tenancy lengths to 12 months.
Ellis thinks that Labour’s proposals will ward off buy-to-let investment and lead to a restriction of housing supply, and inevitably an increase in rents.
The measure would likely put off small or accidental landlords from letting if they are wanting a temporary let because of a short-term job move or posting abroad, for example.
Also, many tenants don’t want such a commitment as they like the freedom and flexibility to move locations with job changes.
According to Ellis, the average UK tenancy is 19 months, while students, a large proportion of the rental market, have an average tenancy agreement of just nine months. How then, he asks, are such restrictive requirements likely to be of benefit?
The main beneficiaries will be tenants renting with families, those families who would have traditionally been housed in the social sector, and likely the demographic Labour have in mind with these proposed legislative changes. But it seems they have failed to consider the needs of the other 90% or so of the people in the private renting market when they contemplate such a change.
“We don’t need more restrictive regulation for landlords, including licensing and rental caps, which are only likely to suffocate the private investment the capital’s PRS desperately needs to support its residents.
“Flexibility is the key to the success of the PRS market and rent controls are inflexible. The introduction of these would restrict both landlord and tenant choice, only deterring the investment into the PRS that we need to support generations of renters.”
— LandlordZONE (@LandlordZONE) April 17, 2015