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The NLA has submitted evidence to the government following its consultation on how to overcome barriers to creating longer tenancies in the buy to let sector.
The National Landlords Association has strongly objected to the government’s suggestion of a three-year tenancy model due to the increased risks it poses for landlords. Instead it has advocated the urgency of reforming court processes so that tenants are able to be removed where there is a breach of tenancy without undue delay or cost. They state that this needs to happen before any longer tenancies can be introduced.
In addition, the consultation emphasised the importance of maintaining Section 21 as well as the importance of flexibility in tenure length. This will account for the needs of different tenants and landlords.
The consultation also raised the risk that break clauses and regulated annual releases in rent could lead to landlords changing their behavior to end tenancies before they enter into a longer fixed period. They could also more regularly enforce rent increases.
Finally, the NLA spoke of the value of using incentives to encourage behavior change rather than a mandatory approach. They stressed that should a mandatory approach be enforced, many landlords may leave the market to avoid risk.
NLA Chief Executive Officer Richard Lambert said: ‘In his speech to the Conservative Party conference last October, Sajid Javid announced plans for a consultation on how to encourage longer tenancies. That’s been the tone of the discussion ever since – consultation and encouragement. Frankly, right now, I feel we’ve been misled. This is supposed to be about meeting the needs of the consumer. NLA research with tenants finds consistently that around 40 per cent of tenants want longer tenancies, but 40 per cent do not. More than 50 per cent consistently say that they are happy with the tenancy length they were offered, and 20 per cent tell us that when they asked for a longer tenancy, they got it.’
He continued: ‘We would accept that the flexibility of the current Assured Shorthold Tenancy isn’t used as effectively as it could be, and that we should be looking to find ways to ensure that tenants are offered the kind of tenancies they need at the time they need them. That means thinking about how to modernise a model devised 30 years ago, to take account of the changes in the people who are renting and the way they live their lives. How will that be achieved by moving to a more rigid system, more reminiscent of the regulated model the current system replaced? It’s like urging someone to update their 1980s brick-style mobile phone, but instead of giving them a smartphone, offering them a Bakelite dial phone plugged into the wall.
He concluded: ‘This is a policy which the Conservatives derided when it was put forward by their opponents in the past two General Election campaigns. It’s hard not to see this as more of a political move aimed at the renter vote than a genuine effort to improve how the rented market works for all those involved.’