What are the benefits of longer tenancies for landlords?

Over the course of our campaign for the introduction of longer tenancies a number of landlords have got in touch with us to explain why they support giving renters more security. This post outlines the benefits to landlords of longer tenancies.

There is a growing need for longer, more secure tenancies in the private rented sector. More and more private renters are bringing up children or growing old in a rented home and they need to be confident they’ll be able to stay their home for the long term.

This need currently isn’t being met by a rental market which has struggled to keep up with the changing nature of who rents.

But it isn’t just tenants that support the introduction of longer tenancies: a large number of landlords also support their use. Our research shows that around a third of landlords like the idea of 3-5 year tenancies, where the tenant has a break clause. A further third say they are open to the idea.

This isn’t only because these landlords want to ‘do the right thing’. Longer term arrangements make good business sense too. We spoke to a number of the landlords who got in touch to say they support the campaign to understand what the benefits for them are.

A tenant who cares about their home

“…there’s a mutual interest in the upkeep of the property… Tenants who can feel the property is their proper home for a long time, and that the some of the rent they pay will go towards repairs and maintenance are far more likely to look after it well.” – Maureen, who has been a landlord for twelve years.

When people feel they have a stake in something, they are more likely to look after it. This can minimise costs for landlords in a number of ways:

  • Tenants who invest in the property – if a tenant is confident they are going to live in a property for the long term they can be more willing to invest in the property by redecorating or buying furniture. For example, when we spoke to renter Suzie recently, who rents her home on one of the government’s model tenancies, she told us that getting a longer tenancy gave her the confidence to redecorate the property, including repainting a room and replacing some curtains
  • Tenants who take steps to minimise wear and tear – landlords can’t deduct from a deposit for wear and tear. While wear and tear can’t be eradicated, a careful tenant who is expecting to stay in their property for a long time can minimise it. For example, things like not wearing shoes inside can extend the life of carpets.
  • Tenants who report problems as soon as they occur – problems like leaks can spiral and become much more expensive to fix if they aren’t dealt with quickly. A tenant who is confident they are going to live in a home for the long term has a much stronger incentive to work with the landlord to fix it, than one who feels that they may imminently need to leave.

Fewer void periods

“Having long term tenants provides me with security. Knowing that my property will be occupied for the foreseeable future means I don’t risk any chances of sitting on a costly empty property.” – Hugo, who has been a landlord for three years

A quarter of tenants moved home in just the last year. This high churn is a problem for tenants, who pay high moving costs and feel the effect of instability. But it’s also a problem for landlords, because an empty home doesn’t generate any income and paying an agent to find new tenants can be costly.

It might be argued that short term contracts don’t contribute to this churn – that they allow for tenants to stay for as long as they and the landlord want. But I can tell you from personal experience: when you’re on a six month or one year contract, it’s only natural to start to look around as you approach the contract term, because there is a risk you may be forced to move anyway.

We’re familiar with this in other areas of the economy. If you’re an employer with a temporary member of staff you want to keep, you’d think of offering them a longer contract. That way they’d be less likely to look around for something else. The same thing applies in rented housing.

A better relationship between landlord and tenant

“It also means you can develop a relationship and build trust with your tenants, not having to start again and thinking ‘are they going to be okay?’” – Ruby, who has been a landlord for seventeen years

Finally, the landlords we spoke to said they thought having longer-term, more secure tenancies promotes better relationship between landlords and tenants. In part, this was about the duration of the relationship and getting to know their tenant.

But it was also about the power dynamic underpinning the relationship. Our research has found that 43% of renting families worry about losing the home they currently live in.[1] It is very difficult to build a positive relationship with your landlord if you are frightened of being evicted by them.

These conversations with landlords have given us a valuable framework for understanding the benefits of longer tenancies from their perspective. We now plan to do further research to quantify each of these benefits and will publish our findings here when we have them.

In the meantime, you can join our campaign to introduce longer tenancies in the private rented sector here.

[1] YouGov for Shelter; base: 784 private renters with children in household, England, July 2015, online, weighted.

  1. I would be happy to give my tenants longer tenancies, indeed I have had some of them for over 10 years. I want them to come, be happy, and stay. I have never raised rents on a sitting tenant… until now.

    Now I am forced to because of the tax attacks by Government which Shelter support. I can raise them very significantly on the longer term tenants before they start hitting market rate. I’ve started doing this and will continue to do so to cover the extra tax I will be paying due to the restriction of mortgage interest relief. None of the tenants affected have got any desire to buy their own place but will now see a much greater slice of their income go towards an unfair, unjust and totally immoral tax.

    Well done Shelter on your support of this attack.

  2. My mortgage constrains me to issue tenancies of six months but my tenants can stay as long as they please. I have never evicted a tenant for reasons other than antisocial behaviour or serious rent arrears.
    There is no need for longer tenancies, there is need for tenant education.

  3. Dear Mr Bibby,

    If Shelter wishes landlords to offer longer tenancies it should end its support of the Section 24 Tenant Tax: the primary obstacle to landlords doing just that.

    Thanks to Section 24, many landlords are now being forced raise rents for sitting tenants (or sell up and evict them) where previously they would not have.

    Please stop ignoring the elephant in the room and practice what you preach.

  4. I am a long term landlord who supports and appreciates his long term tenants. In principle – and with certain landlord safeguards – I am not opposed to long-term tenancies. I have a long-term, low LTV business model that exists purely because I ENJOY housing people and want them to have very long term tenancies. Indeed, I just granted a tenant a 4-yr fix at low rent (BMV by 25%) precisely for this reason. Most other tenants are up to 11-year stalwarts and like many professional landlords I have not shifted rents upwards on any existing tenant. I have no wish to bleed every penny out of a tenant and take great joy in seeing them build their lives in happy homes.

    The problem for me is that low rents and long tenancies will become a thing of the past under Section 24. The government have manoeuvred me into a position that is virtually impossible to escape from without massive rent rises – which I do NOT want – or eviction of up to 26 families, which I want even less!

    If S24 gets stopped, I’ll carry on as before, providing fully refurbished homes each time at cheap or affordable prices. But if we have S24 forced on us next April, I shall have NO choice except higher rents and mass evictions, when the last thing I want to see is my families struggle, or forced into a single room at Travelodge!

  5. So if some landlords want longer tenancy agreement what it to prevent them offering these to tenants? I can’t find the answer to this in the piece above.

  6. With more families in rented accommodation of corse longer tenancies are needed people need homes just like I. Europe a home to raise a family not a 6 month insescure tenancy

  7. When a company takes on an employee they are probation. How can a landlord be expected to take sign a 5 year contract, without getting to know the tenant?.

    There are some tenants who cause Anti-social behaviour. It is easier to carry out a no-fault eviction rather then going to court trying to produce evidence. Neighbours who complained may face revenge attacks….

    Some landlords, such as me are smell so after 4 years of renting, we would need to property back to renovate it. It is not safe, to carry on repairs, whilst someone is living there….

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