Market Insight - May/June 2015
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A Changing Tenure
Different tenants mean longer tenancies

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The private rented sector seems to be on an endless path of growth. Far from slowing down , 421,000 extra households formed in the private rented sector (PRS) last year, that’s roughly the population of Bristol. In the last 10 years the number of households renting has doubled, to reach 4.4 million. 

It’s not just more households renting, it’s people of different ages, wealth and life stage. Over 30s now account for more than half of renters and make up most of the growth in the sector. Older tenants often means households in later life stages, more families in particular. The English Housing Survey shows that 36 per cent of renting households contained children in 2014, that’s nearly 1.6 million families, a 20 per cent increase from 2013.

The growth of families living in rented homes accounts in part for a steady increase in average tenancy length, the time a tenant has lived in their home. Across all the homes we manage, the average tenancy length is just shy of two years, at 22 months. Tenancy length has been steadily growing over the last five years, with tenants choosing to stay in their homes seven and a half months longer than five years ago, when the average tenancy length was only 14 months. Families of course tend to need more security of tenure than the footloose young professionals traditionally associated with the private rented sector. Unplanned moves can be particularly disruptive for children’s schooling.

The changing makeup of the private rented sector was the driver behind Labour’s plans for longer, three year tenancies. Longer contracts certainly have a place in the sector, but equally those who want the flexibility renting offers need to be catered for too. We still think that having standard contracts for six, twelve and thirty six months offers a good next step towards introducing more security of tenure into the private rented sector. The relevant length to be agreed between landlord and tenant.

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