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Proposals for incentives for property investors offering longer tenancies are being welcomed by the buy to let sector.
The much-publicised consultation on the matter of three year tenancies has recently seen the government propose a number of options in order to aid the implementation of the three-year tenancy model. The proposals come in response to a growing demand from families and older people for longer tenancies in the private rental market. The government had suggested that it would be consulting on plans to have three-year tenancies as standard, with a six-month break clause and certain exemptions for students.
One of the options proposed by the government is financial incentives. The government argues that these could be ‘quicker to implement’ than mandatory three-year tenancy agreements.
Policy director for the Residential Landlords Association, David Smith, spoke out about the matter: ‘With landlords having faced a barrage of tax increases we believe that smart taxation, such as that being proposed today, would provide the longer term homes to rent many families and older people want. We would warn against making it a statutory requirement to introduce three year tenancies. Many tenants simply do not want to be tied to a property long term. It is vital that the market is able to provide the flexibility that many need in order to swiftly access new work and educational opportunities.’
In contrast, Build To Rent operators were in support of the government’s proposed three year tenancies in the private rental sector. Managing director at Moda, a BTR developer, Johnny Caddick said: ‘It makes sense that residents are given security of tenure. So we support these moves provided people have flexibility if they only wish to stay for a year or two. We need a customer-centric rental market if people are to grow confidence in the property sector. That has to mean encouraging more rental development through the planning system that is willing to provide better homes with no risk of eviction because the landlord wishes to sell or move back in.’
If you missed the comments from NLA on this subject click here