Landlords will be deterred by three-year tenancies
The prospect of the Government introducing mandatory three-year tenancies will see 32% of landlords being put off from investing in new rental homes, a survey reveals.
The findings from Paragon reveal that landlords say that three-year tenancies would lead them to be unlikely to consider some tenant types.
As result, landlords said they would prefer letting to older couples, for 36% of landlords, to retired people, for 29%, and renting to families for 25% of landlords.
The survey also highlights that 25% of landlords would prefer renting their property to older single people.
The firm's latest PRS Trends report highlights that landlords believe that a mandatory three-year tenancy would make them less likely to take on itinerant or mobile groups with 45% stating they would be likely to rent to students.
Landlords said they would prefer not letting to migrant workers
Also, 40% of landlords said they would prefer not letting to migrant workers and 24% said young singles.
Paragon's director of mortgages, John Heron, said: "Landlords highlight the tenant diversity and call for diversity in tenancy arrangements.
"While some tenants value security, others will favour flexibility. For example, young professionals value flexibility when they want to move to different types of property and areas."
He added: "Rather than imposing long term tenancies as the default or primary legal arrangement, it might be preferable to improve tenants' rights for them to choose different tenancy lengths and to boost landlord incentives for entering long-term tenancies when requested."
Despite reports that the government has scrapped its plan for bringing in mandatory three-year tenancies recently, industry experts say that the plans may return to the government's agenda in the Autumn Budget.
Why landlords want to increase rents
Meanwhile, a study has revealed why landlords with buy to let properties want to put up the rent.
The research from Property Partner highlights that for 37% of landlords, the higher taxes that have resulted from buy to let rule changes have seen them increasing rents.
Also, 25% of landlords say that high stamp duty costs when buying an additional property means they will pass these costs on to tenants.
The study also reveals that over the last 18 months, landlords have increased rents by 21% on average to help compensate for the changes to the UK's BTL sector.
The firm's head of research, Mark Weedon, said: "The Government wants to protect tenants and recognises the rental sector's crucial role so it's ironic that their initiatives force landlords to pass on costs to renters."
