Amy Horn


3 Year Tenancy Agreement News

The proposal is that three-year leases be introduced by default, with semi-annual break clauses, if one of the parties – owner or tenant – wants to withdraw prematurely from the contract. The share of houses peaked in the early 2000s with 71% of households, but has fallen to 63% in recent years. The government is concerned that short leases could lead tenants not to want to challenge poor real estate standards, fearing that their leases will be terminated. Build To Rent (BTR) operators have strongly supported these proposals. Johnny Caddick, managing director of Moda, a developer of BTR, said: “It makes sense for residents to get security. We support these measures, as long as people have flexibility if they only want to stay for a year or two. We need a customer-oriented rental market if people want to build confidence in the real estate sector. Mark continues: “In addition, rent increases can be capped or excluded over a three-year period, which gives tenants greater visibility of their future expenses, but can lead to landlords being taken out of pocket when mortgages increase.” Figures show that tenants stay in a home for an average of four years, but eight out of ten contracts are at least six or twelve months. a. Housing organization Shelter said the loss of the lease was the “main driver of homelessness” and called on the government to “go beyond three years.” Will Bartley, a dispute resolution lawyer, commented: “As a result of these changes, many investors have stopped expanding their portfolios or leaving the industry altogether. The introduction of these three-year minimum periods could speed up this process. While it improves the status quo for tenants, it could mean that the rental market offers a few contracts, offers less choice to tenants. Many industrial business leasing professionals suggest that switching to three-year fixed-term contracts with six-month break clauses will make it more difficult for landlords to scare away problematic tenants, such as those who do not pay their rent or damage property, prompting some investors to consider whether it makes sense to continue renting their property. Book your seat for the RESI 2018 convention to participate in the debate on three-year leases and BTR A.

It is expected that rents can be increased once a year, at a rate agreed by the landlord and tenant at the beginning of the rent.

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