Longer term contracts are to be made available by The Mortgage Works (TMW) to tenants of their borrowers.
The move makes TMW the first mainstream buy to let lender to offer such contracts.
Most lenders restrict buy to let borrowers by requiring them to offer their tenants a maximum contract of 12 months. By allowing customers the choice to offer longer term lets – up to three years – TMW will not only bring greater flexibility to the private rental sector, it also has the potential to provide more stability to the increasing numbers of families who rent homes privately.
Henry Jordan, TMW’s Managing Director, said: “The private rental sector has grown and changed phenomenally over the last few years, with rising numbers of families looking to rent in particular. We want our buy to let customers to be in a position to be able to meet the changing needs of the market. According to Shelter, one in five families now rent rather than own. Families are more likely to want longer term tenancies to, for example, ensure continuity of schools, so giving our customers this option will bring greater stability to this growing market segment.”
Campbell Robb, Shelter’s CEO, said: “This news is very welcome recognition that six or twelve month tenancies just aren’t working for England’s nine million renters. More and more families are now renting their homes, but all too often short tenancies mean changing schools, leaving friends behind and growing up with constant upheaval.
“With two-thirds of renters saying they would like the option of staying in their home long-term, it’s encouraging that Nationwide is leading the mortgage industry to help make renting more stable. We look forward to other mortgage lenders following suit.”
Longer term tenancies are the latest in a series of initiatives by TMW aimed at supporting the growing and changing private rental sector. In February, TMW relaxed its criteria with respect to tenants in receipt of housing benefit, again recognising the needs of a substantial part of the market. TMW plans to reinforce these initiatives through the publication of a Landlords’ Guide which clearly outlines what is expected of landlords on matters ranging from tenancy agreements through to safety checks.
