Do Tenants Want To Be Locked Into A 3 Year Tenancy Every Time?

Posted on: 11 July 2018

The government recently announced plans to implement mandatory 3-year terms for all Assured Shorthold Tenancies across the country, however although tenants and landlords can agree to longer terms at the moment, most don’t. The government says that uncertainty in length of term of tenancies can lead to tenants feeling insecure, unable to challenge poor property standards for fear of tenancies being terminated, and unable to plan for their future.

But all tenants are different?

Nevertheless, they have failed to take into account that there are many different types of tenant with many different requirements. They haven’t considered that a long-term tenancy is not suitable or indeed preferable for many tenants and this ‘one size fits all’ approach to regulate the private rented sector doesn’t recognise the diverse needs of not only tenants across the country but also landlords.

Our average length of tenancy currently much lower than three years

In 2017/2018 at CGT Lettings Ltd, our average length of tenancy across all 5 branches was 23 months, which was nearly exactly the same for 2016/2017 at 22.8 months. Although it is possible to have tenancy agreements created at just under 3 years, it is clear from our average length of tenancies that many tenants do not take up this option preferring to take out a 12-month agreement and review their options in 12 months’ time. We are also finding that tenants generally move of their own accord as 80% of tenancies end due to the tenants giving notice to vacate rather than possession being sought by the landlord.

When I was a tenant....

Speaking from personal experience as a tenant until last year, I moved rental properties three times in five years as the first property outgrew me and the second was in the wrong area for my needs. Trapping all tenants into 3-year tenancies doesn’t take into account tenants who are renting temporarily because they wish to buy, or tenants who are renting for work, or tenants that are renting for the first time with their partners. Within our business, we find that the vast majority of tenants who wish to break a 6 or 12-month tenancy early are couples that are splitting up. Even company tenancies that request longer lets request break-clauses added so they can get out if needed.

What about the landlords in all this?

Furthermore, with regards to landlords, recent tax changes, ever increasing regulations and removal of mortgage interest relief mean there are already barriers and pressure for professional property investors. Some landlords, especially those with buy to let mortgages, are uncomfortable signing two or three-year leases in case their circumstances change. Moreover, CGT lettings Ltd has a large percentage of landlords over 60, it is inevitable that these investors will be considering the option of selling at some point to release capital growth and longer fixed tenancies will make this difficult.  Furthermore, 3-year tenancies risk lower rental growth for landlords and with fewer tax incentives for buy-to-let investors already, it can be hard to make the yields advantageous any longer.

I strongly believe that the government need to carefully consider the diverse needs of tenants in the UK and not make snap decisions based on inadequate research, this is essential in order to negate further damage to our industry which has already been hit by legislative change for landlords and agents, and is set for dramatic changes next year with the removal of tenant fees.

Angharad Trueman – Managing Director

CGT Lettings Ltd


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