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Two-year leases and rent review clauses

Journalist: Callum Mason, i

ended 28. June 2023

Typically, renters sign one-year leases when taking on a property, but in the wake of higher mortgage rates and possibly these being passed on to renters, are estate agents seeing more renters ask for longer leases?

Are landlords happy to offer two year leases, and are more placing rent review clauses into their tenancies because of upcoming increases in their mortgage costs?

2 responses from the Newspage community

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Michelle Lawson
Director at Lawson Financial
This is going to depend on landlord themselves. Landlords should be very aware of the restrictions this can bring and, in the current climate, this could actually be detrimental. Whilst it gives security for the tenants, if there is a change of circumstance for the landlord or a rent increase needs to be effected, a 2-year tenancy could restrict this. Landlords need to be very aware of the legislation and the current tabled Renters Reform Bill and the impact this may have on their finances and future plans.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
As a landlord with a diverse portfolio of properties across London and the South East, we have been closely following the changes in the rental and mortgage markets, especially in light of the RR Bill 2023. In the current climate, with the possibility of higher mortgage rates likely to be passed onto renters, it is understandable that tenants are seeking more stability and cost predictability in their ASTs. Offering longer leases, such as two-year terms, can be an attractive option for both landlords and tenants. From a landlord's perspective, longer leases can help reduce the turnover of tenants, which saves both time and money associated with advertising vacancies, screening prospects, and potential voids. A detailed rent review clause in the AST is critical as it allows for periodic rent reviews during the tenancy. This can help mitigate and balance the impact of rising mortgage costs. Longer leases can offer stability, but they aren't suitable for everyone's circumstances though.