The UK government’s new proposal on a three-year minimum rental contract for tenants have been met with angry reactions and opposition from landlords. The plan would permit the tenants to end their contract earlier if they wanted to.
Around 80% of renters in England and Wales have their contracts set to 6 or 12 months with the assured shorthold tenancy (AST). AST is the most common type of occupancy in England which entitles the landlord to regain possession immediately after the initially agreed upon term has expired.
The proposal will run on an eight-week consultation which would be at the end of August 2018. The extended agreement would mean families who are renting can avoid being uprooted since under the present rental contract; landlords can evict their tenants without any legal reason at all or further, tenants would leave because of the hiked rental price upon the renewal of a contract.
Owning a home in the UK have significantly reduced from 72% ten years ago to 73% last year. The primary factor is due to affordability reason from bank reticence to lend to steady wages. The results of which are families resort to renting. Like any other proposals, issues and concerns would undoubtedly arise.
One, landlords would be made to pay higher interest rates, and it would have diminished flexibility in financing their estates. And two, tenants may not be agreeable to a longer-term contract in case they would want to move elsewhere or even buy a house earlier than planned.
The government should, therefore, concentrate on the conditions of the new proposal to include a cap on the rent, the cessation of no-fault eviction and protection against substandard leasing premises.