Renters 'should get used to longer contracts'

Longer tenancies could soon become the norm for renters.

This is the expert opinion of Mark Hayward, chairman of the National Federation of Property Professionals, who noted there is pressure in the market at the moment to make this the new standard arrangement.

It means anyone looking for lettings in London may have to sign a longer contract than they are used to. Mr Hayward observed there are two reasons why this is the case - firstly because of the security it offers and secondly that renting is now viewed as a perfectly acceptable way to live.

"I think that if the private rented sector is ever going to attract significant corporate investment, then those investors are going to have to see longer-term tenancies in place to protect their returns and their investment," he added.

Mr Hayward remarked this practice is very popular in Europe, with people from Spain, France and Germany quite happy to lease houses for a sustained period of time. Another benefit of this system is that householders are much more likely to take good care of the dwelling if they know they will be living in it for a number of years.

The specialist - whose group was formed in 2007 to facilitate the coming together of specialist divisions within the property sector - noted renting has become a more popular option out of necessity.

"Either ... they can't get onto the housing market because they haven't got a sufficient deposit, they don't fit the lending criteria or they don't think that the market is moving forward," he stated.

Figures show that between 12 and 14 per cent of homes are now leased and this figure is expected to rise to 20 per cent by 2020. However, Mr Hayward said one of the main problems at the moment is there is a lack of stock to meet the demand currently being experienced in the private rented sector.

Unless the construction industry picks up, this could continue to be a problem for years to come.

Posted by Chris Price

Published 29th June, 2012

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