Regulation changes drive longer tenancies

A reduction in rental supply due to small landlords leaving the market has caused tenancies to become longer, claims firm.

The deposit alternative provider Flatfair says the rental market has changed dramatically over the last few years due to regulation and is encouraging letting agents to reassess how tenancy risk is managed.

Under the Renters’ Rights Act, all fixed-term tenancies will be banned and become periodic, which many industry experts have warned could create chaos, particularly for student landlords.

Higher rents and longer tenancy durations

Emma Parsons, sales and partnerships director at flatfair, said the rental market has changed fundamentally.

She adds: “While smaller landlords continue to exit the private rented sector in response to rising costs and increased regulation under the Renters’ Rights Act, the resulting reduction in rental supply has helped sustain higher rents and, in many cases, longer tenancy durations.”

Flatfair says traditional letting agents can learn from the build-to-rent (BTR) sector, as many of the principles that underpin BTR operations are becoming increasingly relevant across the wider private rented sector.

Bex Hetherington, head of operations at Native Communities, said build-to-rent has long taken a lifecycle approach to tenancy risk, balancing protection with customer experience.

She added: “As the sector becomes more stable but increasingly constrained, these principles are becoming more relevant for agents operating in the private rented sector.”