With renting as opposed to owning a property becoming the norm in the UK, landlords are finding it increasingly difficult to obtain mortgage funding for long-term tenancies. The majority of mortgage lenders are only willing to offer funding for tenancies that last between six and twelve months. Unfortunately, many landlords prefer to give their tenants long-term tenancy agreements because they offer a greater level of security to tenants.
Assured Shorthold Tenancy Agreements
In the UK, an Assured Shorthold Tenancy Agreement is the norm. Tenants are allowed to stay put in their rental homes for up to one year. Any longer than that and the tenancy agreement needs to be renewed. But a lot of landlords and tenants are not happy with this state of affairs. They want to be able to enjoy longer tenancies.
More Stability for Tenants and Landlords
Figures indicate that more than half of all tenancies in the UK last between one and three years. A further third last for four years or longer, which is similar to the situation in Europe. Since many of those living in rental accommodation are families with school age children, long-term tenancies offer more stability. Rather than moving home every year or less, which often means moving schools, too, a long-term tenancy is a much better idea for families. It is also better for landlords. Rather than having to look for new tenants and facing a possible void period, a landlord can enjoy regular rental income from a reliable tenant.
As renting grows in popularity, it looks likely that larger cities in the UK will soon have more tenants than owner-occupiers, which is a good thing for landlords.
