Lenders can make it easier for landlords to let to good tenants for longer
Posted by Sue Hopson
Buy-to-let mortgage lenders are preventing landlords from renting out properties on longer leases, it has been claimed.
According to David Lawrenson, founder of private rent consultant lettingfocus.com, encouraging landlords and residential lettings agents to offer longer leases to good tenants would help alleviate the pressure of rising rents on tenants' finances.
Writing in an article for the Guardian, he explained: "Despite popular perceptions, our findings are that the majority of landlords actually want to hold on to good tenants for a long time - even if it means they have to accept less than market rent."
However, Mr Lawrenson claimed that mortgage companies are preventing more landlords from doing this as they often stipulate a maximum term for rental agreements of a year as part of their buy-to-let lending criteria.
"Our work with lenders has challenged the logic of this and I'm sure we will see longer-term assured shorthold tenancies become the norm in the future," he said.
Meanwhile, lenders are also partially to blame for landlords being less willing to take on tenants who receive housing benefits.
"Under buy-to-let mortgage conditions some lenders scandalously preclude a landlord from letting to 'non working' people. Only when these differences are removed will landlords be really willing to let to tenants who are dependent on Local Housing Allowance (LHA)," he explained.
However, Mr Lawrenson also noted that there are many other barriers to landlords offering tenancy agreements to those on housing benefits that need to be addressed.
Taking on those who receive LHA is seen as a "huge extra hassle for landlords", he said.
"In a private let, a landlord is paid rent in advance and receives a deposit they can bank and earn interest on. Plus, the process requires a lot less paperwork. Rent payments are less likely to stop without warning simply because the tenant's eligibility for support has changed."
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