Short tenancy agreements are undermining the buy to let market with uncertainty for millions of tenants and landlords.
With standard tenancy agreements lasting six months or a year, tenants do not know whether to call a rented property home and landlords cannot make long-term plans as they cannot rely on a regular income.
Research by Axa Business Insurance reveals although many tenants expect to rent a home for at least 10 years and stay in their buy to let home for an average two years, only 18% felt longer tenancy agreements of five to 10 years would benefit them, while 60% prefer to keep to their current shorter agreements.
A third of tenants disclosed that they prefer to rent rather than buy a home.
They explained they liked the freedom to move and lifestyle of renting. Close to a fifth moved regularly to build a career, while a similar number liked the lack of commitment that comes with renting a home.
The research also showed that two thirds of tenants – close to 3 million people – planned to move to a different part of the country.
A number of stepping stone cities where tenants stay for a short time before moving on were identified, including London, Bristol and Edinburgh.
The top five places where tenants stayed the longest are Norwich; Wolverhampton; Chelmsford; York and Southampton.
“Private landlords are filling the gap left by the decline in social rentals and home ownership, and they are the second biggest source of housing,” said Axa’s Darrell Sansom. “But rental culture is not as well embedded in British society as in other European countries.
“Short-term tenancies prevail which means that both landlords and tenants can feel as if the ground is constantly shifting under their feet. How can tenants create a sense of home in this situation? And for landlords, a revolving door of strangers means income insecurity, more vacancies and extra wear and tear.”