Santander has extended its assured shorthold tenancy (AST) policy from 12 months to 36 months, which could spell a new attitude to the rental sector.
The Spanish bank’s announcement is intended to give tenants added security by allowing rents to stay at the agreed level for longer, enabling them to budget on a more long-term basis.
However, the change is expected to benefit landlords, too, as it will mean less void periods when their properties aren’t generating any income, as well as taking away the hassle of finding new lodgers on a more regular basis.
Assured shorthold tenancy agreements are the most common form of tenancy. They are used by private landlords and housing associations on tenancies that started on or after 15 January 1989, where the property is a tenant’s main residence and not occupied by the landlord.
Most ASTs are a maximum of 12 months, and landlords are able to increase rents after six months, creating uncertainty and sometimes even financial hardship for tenants.
Driving up quality
Miguel Sard, director of mortgages at Santander, said: “In areas such as London and the south-east, property prices continue to rise and outpace wage growth significantly. Many renters aspire to take a step on the property ladder, but are resigned to ploughing their money in to rent, unable to save for a deposit.”
Attitudes towards renting in general are changing, as it is no longer seen as something that only students and young people do. Young professionals, families, and even the latest influx of the Silver Generation of renters are increasingly looking for better rental options than have been previously available, creating new demand for build-to-rent.
Landlords are also being forced to up their game to accommodate the growing renting population, as new ratings websites and apps make it easier for tenants to rate their experience, driving up the overall quality of rentals available.
