According to the Guardian newspaper this morning, Nationwide is now willing to lend to landlords wishing to offer three year rental contracts on their properties. This is something of a turnaround because previously, Nationwide, in line with other lenders, would only make finance available when tenancy agreements were capped at twelve months. So if you were looking to let a property on a tenancy agreement lasting longer than twelve months, there was little point in applying for a buy to let mortgage.
Security for Tenants in the Buy To Let Sector
Renting a home is becoming increasingly common in the UK and the housing charity Shelter has been campaigning for a while now for greater security in the private sector. They are particularly concerned about families with school age children who stand to lose the most when a tenancy agreement ends and they are forced to move to another property, sometimes at short notice.
A comment made by the chief executive of Shelter: “This news is welcome recognition, as six or 12-month tenancies just aren’t working for England’s nine million renters.”
Greater Security for Landlords
It isn’t just tenants who stand to benefit from long-term tenancies. As any landlord knows well, if you have a reliable tenant who pays their rent on time, the last thing you probably want is to lose them. With this in mind, a 3-year tenancy agreement is a sensible idea. Both you and they each know where you stand and the tenant is more likely to look after the property if they are likely to be staying for a while.
