Earlier this month, we outlined our key asks of the government in our Budget submission, ahead of Monday 29th October.
Here, we break down the document to run through what we believe the government could do to support you, the residential landlords out there offering vital homes to let. In this article, we take a closer look at what we are calling for when it comes to longer tenancies and financial incentives.
In its submission to the 29th October Budget, The RLA is calling for the use of tax incentives to encourage landlords to offer longer tenancies, if they are wanted.
The Government ran a consultation recently on longer tenancies, and this is something that the RLA welcomed, agreeing that the use of financial incentives to provide them “could be quicker to implement” than imposing a statutory standard three-year tenancy across the sector.
Flexibility in the system
This kind of approach would ensure that there remained flexibility in the system for those tenants who do not want to commit to a longer tenancy.
The RLA’s priority is to make sure there is still flexibility, and that the landlords who still want to, are able to offer the shorter tenancies which many tenants, especially young people, prefer.
In its Budget submission, the RLA believe that using legislation would become complicated because every possible scenario would need to be envisaged to permit tenancies of less than three years. Added to this, landlords would become reluctant to rent to any tenant that could be seen as carrying any form of risk at all, as they would perceive a risk of being stuck with that person for the longer term.
The RLA’s research exchange, PEARL, found that 63% of landlords have said that tax relief would encourage them to offer a longer tenancy. This figure was included in the Government’s longer term tenancy consultation document, when the consultation launched in July.
RLA PEARL research has also found that 73% of landlords would offer longer-term tenancies with a combination of financial incentives, and court reform to ensure that they have the confidence that where they provide a longer tenancy they can swiftly regain possession in cases such as tenants failing to pay their rent or committing anti-social behaviour.
In the submission, the RLA reiterates that such a proposal as the one above would need to run in parallel with the Government developing its plans for a dedicated Housing Court. If something goes wrong in a tenancy, a Housing Court would speed up justice for both tenants and landlords, especially in long term tenancies.