Secretary of State for Housing James Brokenshire said in a speech in London that the planned move is part of a wider plan to make renting more secure, especially for families.
‘I know this is particularly important for the growing number of families, vulnerable tenants and older people who rent and live with the uncertainty of suddenly being forced to move or fear eviction if they complain about problems with their home,’ he explained.
He pointed out that the consultation, which will run until the end of August, aims to overcome current barriers to longer tenancies in the private rented sector.
‘We’re proposing a new longer tenancy model, of a minimum of three years, with a six month break clause to allow tenants and landlords to exit the agreement early if needed,’ Brokenshire said.
He added that he will also be launching a call for evidence in the autumn to better understand and improve the experience of people using courts and tribunal services in property cases, including considering the case for a specialist Housing Court.
Current figures show that 80% of tenants currently have contracts of six or 12 months the Government believes that longer agreements would allow them to put down more roots and be beneficial for landlords as it would give them more financial security.
It is understood that exemptions could be made, for example, in the case of students who may not be able to sign up for a three year tenancy because of the nature or length of their course of study.
Some think the minimum should be even longer in some cases. ‘This is an important step forward. Losing a tenancy is the main driver of homelessness and also causes huge instability for renting families, so everyone who rents will be very pleased to see a move towards longer tenancies,’ said Polly Neate, chief executive of housing charity Shelter.
‘But if the Government really wants to stand up for renters, they should provide real protection from eviction, and the huge upheaval of having to move home, jobs and schools,’ she added.
Get Living, a rental management company in the UK’s growing Build to Rent sector, is backing universal three year tenancies which it already offers. ‘Renting shouldn’t be a second rate choice to home buying. With three year tenancies and resident only break clause after six months, residents have the reassurance of long term security while having the flexibility to follow their careers or their thirst for adventure, without being tied in to a home,’ said chief executive officer Neil Young.
‘With more than 20,000 Build to Rent homes complete across the UK and almost 100,000 more in the pipeline, our sector is starting to show that, done right, renting can offer much more than it’s given credit for,’ he added.
But the National Landlords Association (NLA) is not convinced that there should be a minimum. ‘NLA research with tenants finds consistently that around 40% of tenants want longer tenancies, but 40% do not. More than 50% consistently say that they are happy with the tenancy length they were offered, and 20% tell us that when they asked for a longer tenancy, they got it,’ said chief executive officer Richard Lambert.
‘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,’ he pointed out.
‘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,’ he explained, adding that setting a minimum of three years would actually amount to moving to a more rigid system.