Tenants are renting for longer than ever
The trend of tenants renting for longer periods of time is becoming increasingly common. For example, an English Housing Survey reported by Uswitch found there was a 16.22% increase in the average length of tenancy from 2010/11 to 2022/23, when the typical tenant stayed put for 3.7 years (around three years and eight months).
There are a number of factors that are contributing to this trend, including the rising cost of living, increasing interest rates, and a growing number of people who are choosing to rent rather than buy.
Cost of living crisis
The cost of living crisis is one of the main reasons why tenants chose long-term rent. The cost of food, energy, and other essential goods and services has been rising steadily in recent years, making it increasingly difficult for people to save for a deposit on a house. As a result, many people are choosing to rent instead of buy, as it is a more affordable option.
Mortgage interest rates for first-time buyers
Another factor that is contributing to the trend of longer tenancies is the rising cost of borrowing. Interest rates have been on the rise in recent months, making it more expensive to get a mortgage. This is making it more difficult for people to afford to buy a home and is pushing them towards renting instead.
Lifestyle choice to rent
A growing number of people are choosing to rent rather than buy as a lifestyle choice. Many people no longer see home ownership as the be-all and end-all, and are instead choosing to rent so that they have more flexibility and freedom. They may be happy to move around more often, or they may prefer to have the option to move to a different city or country without being tied down by a mortgage.
What are the benefits of longer tenancies?
There are a number of benefits for both landlords and tenants when tenancies are longer. For landlords, longer tenancies mean they have a more stable income stream, as they know that they will be receiving rent payments for a longer period. This can help to reduce the risk of tenants defaulting on their rent payments, and can also make it easier for landlords to budget for their expenses.
For tenants, longer tenancies offer a number of benefits as well. They can enjoy greater peace of mind knowing that they will have a place to live for a longer period of time, and they may also be able to negotiate a lower rent if they are willing to commit to a longer tenancy. Additionally, longer tenancies can help to build a stronger relationship between landlords and tenants, which can lead to a more positive experience for both parties.
Is long-term rent better for landlords?
In general, yes, long-term rent is better for landlords. This is because it provides them with a more stable income stream and reduces the risk of tenants defaulting on their rent payments. Additionally, long-term tenants are often more likely to take care of the property and make repairs as needed.
However, there are some cases where short-term rent may be better for landlords. For example, if a landlord is looking to renovate a property, they may prefer to rent it out on a short-term basis so that they can have more control over the property and make sure that the renovations are completed to their satisfaction.
Conclusion
The trend of tenants renting for longer is becoming increasingly common. There are a number of factors that are contributing to this trend, including the rising cost of living, increasing interest rates, and a growing number of people who are choosing to rent rather than buy. Longer tenancies can offer many benefits for both landlords and tenants and can help create a more positive experience for everyone involved.
Posted on: 14 May 2023
