Long-term tenancy agreements are far more in demand than short-term lets

The proposed Renter’s Rights Bill (RRB) states that landlords will be unable to secure fixed-term tenancies for their rental properties, making it difficult to gain the security of agreeing long-term contracts with tenants.

But new research by FCC Paragon reveals that among tenants themselves, the appetite for short-term contracts is tiny compared to demand for more standard long-term agreements.

FCC Paragon has analysed demand data for short-term rental properties in Great Britain* (excluding holiday lets) and found that across the nation just one-in-ten (10.4%) short-term lets currently on the market have managed to secure a tenant (let agreed).

Meanwhile, more than a quarter of long-term rental properties have already secured a tenant, with demand sitting at 25.2%. This is a difference of 14.8% compared to short-term lets.

This suggests that while the Renter’s Rights Bill purports to put power into the tenant’s hands by making it impossible for landlords to insist on long-term agreements, long-term agreements are actually what tenants appear to want.

The appetite for short-term rental contracts gets even weaker on a regional level.

In London, demand for short-term lets sits at just 7.1%. This is 14.7% lower than demand for long-term agreements in the capital (21.8%).

Short-term demand in the North East sits at just 7.8%, while it’s also particularly weak in Scotland (8.3%), and Wales (11.6%).

In fact, across all regions of Great Britain, the appetite for long-term lets is stronger than that for short-term lets, with the largest disparity being found in the South West where demand for long-term agreements (30.6%) is 18.9% higher than that for short-term (11.7%).

Even if the two regions where demand for short-term lets is quite strong – East of England (34.1%) and North West (22.5%) – it remains weaker than demand for long-term alternatives which sits at 35.6% and 23.3% respectively.

Managing Director of FCC Paragon, Bekki Leaves, said, “Landlords are understandably concerned about what impact the Renter’s Rights Bill will have on their businesses, not least the sections of the bill that deal with tenancy agreements and evictions.

By installing assured periodic tenancies as the new norm, the RRB eliminates a landlord’s chances of securing the guarantees of a long-term agreement and as such places power firmly in the hands of the tenant. On one hand we have landlords completely unable to end contracts with the first 12 months, while on the other tenants are free to leave at any time by providing a short notice period.

Rather than create fair equilibrium, this proposal seems to shift the balance entirely in favour of the tenant, but the lack of appetite among tenants for short-term rentals actually suggests that the Renter’s Rights Bill won’t make an awful lot of difference.

The majority of landlords and tenants prefer long-term contracts thanks to the security and stability they provide. Even if the RRB does come into effect, tenants will still prefer to stay in their homes for longer periods of time, which means for good landlords and good tenants, it will continue to be business as usual.”