A tax allowance should be introduced for landlords in the UK that increases the longer the tenancy lasts in a bid to encourage them to offer longer tenancies for those that want them.
The idea is put forward by the Residential Landlord’s Association in its response to the Government’s consultation into long term tenancies and the barriers preventing landlords from offering them.
The document outlines both the difficulties faced by landlords and potential solutions and mentions previous RLA surveys which show that around 40% of members would be prepared to offer a longer tenancy if it was asked for under the current circumstances.
However, they say tenants do not ask and, in some cases, do not desire longer leases and RLA members who responded to the survey raised a number of issues such as wanting to get to know tenants before offering them a longer term tenancy.
Some pointed to restrictions in mortgage conditions and insurance policies preventing them from offering longer term tenancies and others to the complex court process to regain possession.
Overall, over three quarters of landlords, some 77%, said that they do not offer longer tenancies because of the time and cost to regain possession, although 55% said they would be more likely to do so if a more efficient court process was available.
As well as there being barriers for landlords in offering longer term tenancies, recent research from RLA PEARL found, 38% of landlords who responded said tenants don’t want them.
Echoing this, reports from mortgage lenders say that they rarely experience landlords who ask for mortgage terms that restrict tenancies of over 12 months, where these exist, to be lifted.
The RLA is proposing that the Government introduces a tax allowance that increases the longer the tenancy lasts in a bid to encourage landlords to offer longer tenancies for those that want them.
Indeed, some 45% of landlords in the survey reported that the lack of financial incentives was a barrier to offering longer tenancies and the RLA believes that introducing incentives in this way would also encourage landlords to find ways to deal amicably with minor problems rather than evicting the tenant and losing the relief.