Tenants prefer long-term rentals over short-term lets

There appears to be a strong preference among tenants for long-term rental agreements, casting doubt on the impact of the proposed Renters’ Rights Bill (RRB), which aims to eliminate fixed-term tenancies.

The research by FCC Paragon reveals that only 10.4% of short-term rental properties across Great Britain, excluding holiday lets, have secured a tenant, compared to 25.2% of long-term rentals, a significant 14.8% gap.

The RRB seeks to empower tenants by preventing landlords from enforcing long-term contracts, introducing periodic tenancies that allow tenants to leave with short notice.

However, the data suggests tenants value the stability of extended agreements.

Landlords are worried

The firm’s managing director, Bekki Leaves, said: “Landlords are understandably concerned about what impact the Renters’ 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.”

She added: “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 Renters’ Rights Bill won’t make an awful lot of difference.”

She says that most landlords and tenants prefer long-term contracts because they bring security and stability – and tenants will prefer to stay in a home for long periods.

Low demand for short-term lets

The findings from FCC Paragon found that in London, demand for short-term lets is notably low at 7.1%, trailing long-term rentals by 14.7%, which stand at 21.8%.

Similarly, the North East (7.8%), Scotland (8.3%) and Wales (11.6%) show weak interest in short-term options.

Regionally, the South West has the largest disparity, with long-term rental demand at 30.6%, surpassing short-term demand by 18.9%.

Even in areas with relatively stronger short-term interest, such as the East of England (34.1%) and North West (22.5%), long-term rentals remain more sought-after, at 35.6% and 23.3%, respectively.