TENANTS are looking to stay in their rented properties for increasingly longer periods of time according to Landlord Assist, the nationwide tenant referencing and rent collection firm.
Since the start of the recession demand for rented property has reached record levels as people have struggled to secure lending to buy a home and instead opted to rent.
Now with many people still struggling to get their foot on the property ladder, more tenants are choosing to extend their current tenancy agreements beyond their initial term.
According to Graham Kinnear, managing director at Landlord Assist, the trend has been caused by rising rent prices and the difficulty for many in raising large deposits, either to buy a home or move to an alternative rented property.
He said: “In some areas of the UK people are stuck in the rental sector because, at a time when rents are rising, they need to set aside a growing proportion of their disposable income for the rent and cannot raise a new deposit to buy a home or move to a new rented property.
“This hasn’t been helped by recent changes to deposit legislation whereby they are unable to reclaim their existing deposit until they have vacated their rented home.
“In addition, people who would normally be leaving rented accommodation to pursue home ownership are falling in number due to fears of price falls, a lack of confidence in the economy and a general difficulty in acquiring mortgage finance without a substantial deposit.”
With more renters choosing to stay in their existing properties beyond the initial term of the tenancy, the buy-to-let sector is currently experiencing a lack of stock on the market, leaving tenants with fewer options when they approach the end of their tenancy agreement.
That is in stark contrast to the boom years, when tenants were able to negotiate hard on rent prices and upgrade to bigger and better properties with minimal increases in rent.
Stephen Parry, commercial director at Landlord Assist, said: “Longer tenancy periods are great news for landlords as it provides them with greater security rather than void periods and the uncertainty of finding new tenants.
“Meanwhile, while tenants may be renting for longer than they initially envisaged, extending their tenancy agreement does at least provide them with some sense of stability during times of economic uncertainty.”