Leeds Building Society has changed its mortgage criteria in a bid to encourage longer-term private rentals.
The UK’s fifth largest society will now accept tenancy agreements for a period to suit both the tenant and the landlord, and will not stipulate a maximum tenancy period, which was previously set at 12 months.
A number of lenders will now accept longer term tenancies, but most will only go to a maximum of three years and Leeds will be amongst the few with no maximum.
Last week’s report from The Resolution Foundation, citing the sharpest falls in home ownership since a peak in the early 2000s, highlighted that those in the private rented sector were spending more of their income on housing than homeowners and that there was more insecurity in short-term tenancies.
According to research from Shelter, 70 per cent of private renters would value a term between three and five years and the homeless charity has welcomed moves from lenders to amend longer-term tenancy criteria.
“More people are renting for longer but often find that they have little security of tenure, with tenancies often offered only as a six to 12 month option. Leeds’removal of the maximum tenancy period will help increase choice for landlords and their tenants, both of whom may prefer a longer-term tenancy agreement to be in place” according to David Hollingworth of L & C Mortgages.