The homeless charity Shelter has proposed a new kind of tenancy to provide greater stability to both tenants and landlords.

The ‘Stable Rental Contract’ would last for five years, increase rents in line with inflation each year, allow landlords to end the tenancy if they sell the property and also give renters flexibility, allowing them to give two months notice to leave.

Campbell Robb, chief executive of Shelter, said: “With a generation priced out of home ownership, renting is the only choice for growing numbers of people. But with the possibility of eviction with just two months’ notice, and worries about when the next rent rise will hit, the current rental market isn’t giving people – particularly families – the stability they need to put down roots.
“The Stable Rental Contract offers renters the stability of a five year tenancy and gives landlords more confidence in a steady income, all within the existing legal framework. Turning rented houses into homes should be a priority for everyone who cares about the wellbeing of families in this country, and government must now show the political will to make renting better for millions of people desperate for a stable home they can rely on.”

The report draws on research by property consultants Jones Lang LaSalle showing that the proposed Stable Rental Contract could increase landlords’ return on their property investments. The study used economic modelling to find that, compared to the irregular way that some landlords currently increase rents on their properties, their returns would actually be increased with longer-term tenancies and predictable rent rises in line with inflation.

It also indicates that despite the number of people who rent their home from a landlord doubling to 8.5m people in the last 15 years, 35% of renting families worry about their landlord ending their contract before they’re ready to move out.

Also although the current average stay in a rented home is just twenty months, some 66% of tenants say they’d like the option of staying in their home long-term.