New government figures have revealed that that the average tenancy length in Britain has increased to four years from an average of three and a half years in 2015.
Over the last two years, there has been a 300% increase in the average length that tenants are renting residential property, says a July 2016 article on SelectProperty.com.
Some buy-to-let commercial mortgages stipulate that landlords using their loans can only offer a 6 or 12 month Assured Shorthold Tenancy. With many landlords relying on rents to pay their mortgage, the Residential Landlords Association supports longer-term tenancies.
Increasingly, lenders are now allowing longer tenancies. The Council of Mortgage Lenders has announced that over half of its members have commercial mortgages that allow buy to let investors to offer tenancy contracts of at 24 months and longer, reported housing charity Shelter in June 2016.
Part of the reason for the change by lenders is government pressure to promote family friendly tenancies. Many families live in rented accommodation and want the security of a long tenancy. Numerous retired people also rent their homes and want longer tenancies.
Accountancy firm PricewaterhouseCoopers has forecast that out of people now aged 20 to 39, only 26% will purchase their own home by 2025. This means that future demand for rented property will continue to be high. Rental income rises have slowed down but are still 3.5% higher than last year, says SelectProperty.com.
Despite increases in stamp duty and the reduction of tax allowances, investing in the buy-to-let housing markets is still an attractive investment for many landlords.
