The rentals market would be irreconcilably damaged if plans to introduce longer tenancies and rent rises linked to inflation were introduced, according to a new report.

The report by Professor Michael Ball suggests the private rented sector would be fatally undermined if the measures proposed by Shelter were introduced. Ball is a Professor of Urban and Property Economics at Reading University and his report mirrors what the industry has been saying since Shelter started lobbying the Government for changes to the rentals market.

Professor Ball says in his report that under the Shelter model, five-year contracts would be the norm and that the charity also wants all tenants to have the opportunity to leave the property at any point during that tenancy giving two months’ notice but, landlords would not be granted the same power to regain possession of the property from the tenant. Ball states that landlords would face higher risks and lower returns while the beneficiaries amongst tenants would be few and the losers many.

In our experience, some tenants want to stay in the same rental property for longer periods of time and these people can ask for a long-term tenancy agreement which would give them discounts on prevailing market rents. Landlords like to have these sorts of tenants as they provide a guaranteed rental yield but there is absolutely no need to make it mandatory for all, there must be a level of flexibility in the market, not everyone wants to rent for longer.

The report also condemns the idea of linking rents to inflation. No one wants rents linked to inflation, it makes no sense. The report uses official ONS data to show that in each of the last eight years, private rented sector rents have risen by less than inflation so linking rents to inflation would therefore leave tenants worse off.

The Government is currently working on introducing ‘family friendly’ tenancies and the Residential Landlord Association has also proposed its own model agreement where tenants would have a right to renew their existing tenancies based on the current shorthold tenancy agreement. Where a disagreement ensued about renewal, the landlord or tenant could take the matter to arbitration. Unlike proposals for a five-year tenancy agreement, this model would require no new legislation.

There is no need for the Government to intervene and enforce long-term contracts on the market. There is already an existing system that caters for those tenants that want to rent for longer and as Ball states, there is no failure in the formal, fair and mutually binding long-term contracts already available. The Government must take a step back and refrain from putting a stranglehold on the rentals market which provides accessible homes for people who either do not want to or cannot afford to buy.