Mandating long contracts could be bad news for everyone
It was during the weekend that football giants Argentina, Portugal and Spain were all dramatically knocked out of the World Cup, and the UK basked in high temperatures that the Government leaked the news it was set to launch a consultation to increase the minimum contract length to three years.
The proposals contract holders around the introduction of a minimum three-year occupational contract, with a six-month break clause by either party. Additionally, contract holders would be able to end the contract if they provide two months’ notice; which is double the current obligation. Landlords, meanwhile, would be able to end the contract if they have reasonable grounds, e.g. if the contract holder has not paid their rent or if they intended to sell the property.
Sadly, we feel this latest announcement may end up as another blunt instrument aimed at fixing the wrong problem.
At Darlows our concern is that the Private Rented Sector is largely misunderstood by those who set policy around it. We’ve witnessed a revolving door at the top of housing policy, exacerbated by recent news that we have yet another housing minister with Kit Malthouse being appointed in the cabinet reshuffle earlier this month.
It is often the case that a contract holder has chosen to rent because they want the flexibility of a shorter contract and this should be allowed to continue. The reality is that the majority of contracts last longer than the initial six-month term. Our data shows that average contract lengths are approximately 20 months. Meanwhile the consultation paper cited research from the English Housing Survey that claims that 73% of contract holders said their most recent contracts ended because they wanted it to.
The reality is that landlords simply don’t ask good contract holder to move out unless they really need their property back. However, we would welcome any current barriers to Agents being able to offer longer contracts are removed. The consultation ends on 26th August.
