Three and five year tenancy agreements should be made more readily available to give landlords and tenants more security, three industry figures claim.
John Charcol senior technical manager Ray Boulger, property analyst Kate Faulkner and East London-based mortgage broker Jonathan Burridge all backed longer-term tenancies.
On Monday Peter Saunders from the Civitas think tank called for five year tenancy agreements as a standard.
Boulger and Faulkner felt this was going too far but they did think negotiating a longer period should be easier.
Boulger said: “It would be helpful if the government looked at long-term tenancies because we need a rental market where there is more freedom of choice.
“An awful lot of tenants would like a longer agreement because it gives them security.
“It should be easier for tenants to make that arrangement, though there would have to be a penalty for walking away from an agreement.
“From a landlord’s perspective if the tenant wants a three or five year period they don’t have to worry about finding a new tenant and the tenant demonstrates that they are in it for the long-run.
“A number of landlords would be happy to give their tenants a 5% discount in such a case.”
Faulkner said: “Longer-term tenancies are as much in the landlord’s interest as the tenant’s interest – if not more in the landlord’s interest.
“There is a specific market in long-term tenancies – where people are renting because they can’t afford to buy.”
And Burridge added: “I have been saying for a while that tenants need the protection of the longer contracts.
“It would be an advantage to both parties.”
However there are conflicts of interest which make introducing longer-term tenancies problematic, as Boulger explained.
He said: “The majority of buy-to-let mortgage lenders prevent landlords issuing a tenancy agreement for more than a year because they take the view that in the worst case scenario and they take possession of the property it makes it easier for them to sell.
“However I think that argument is flawed because they can become a landlord in possession which gives them the right to receive that rent.
“Lettings agents don’t want longer agreements because it would reduce their fees.
“I don’t think five years should be a standard but it should be an option and to achieve that it needs all parties to band together.”