Plans to end fixed-term tenancies will drive up rents, according to Propertymark.
The government’s wide-ranging Renters’ Rights Bill proposes to abolish Section 21 no-fault evictions, limit rent increases to once a year and scrap fixed-term tenancies among a range of changes.
The Bill says: “Fixed-term tenancies mean renters are obliged to pay rent regardless of whether a property is up-to-standard, and they reduce flexibility to move in response to changing circumstances, for example after a relationship breaks down, to take up a new job or when buying a first home.
“Instead, all tenancies will be periodic, with tenants able to stay in their home until they decide to end the tenancy by giving two months’ notice.”
But estate agents’ body says a fixed-term tenancy “allows for the security of tenure for the tenant and a guarantee of rent payments for the landlord”.
It adds these types of tenancies are popular with nurses working in hospitals for set periods, as well as families who want to stay in an area because their children are at a school.
Propertymark adds: “The complete removal from tenancies of an initial fixed term will cause every tenancy effectively becoming a short-term let which, with limited supply, will drive up rents for individuals, couples and families looking for a long-term home.
“With no security of a rental term for a landlord beyond the two months’ notice period and no long-term guarantee of rent, we would expect to see a significant number of landlords attracted to higher rents in the short letting market, which also offers them the advantage of being unregulated.”
Propertymark head of policy and campaigns Timothy Douglas says: “To support renters, we want to see fixed-term tenancies retained as an option and request that an impact assessment is done on the UK Government’s plans to remove fixed-term tenancies and shared publicly with the sector.
“The government must enact the registration of short-term rental property requirements as passed in the Levelling-up and Regeneration Act 2023 alongside these reforms to level the playing field for landlords and the long-term rental market.”
