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Written by Emma Lunn

Cluttons says many renters could benefit from short-term leases rather than the three-year tenancies now being suggested by Labour, rental groups and some charities.

Analysis by Sue Foxley, Cluttons’ research director, shows that even in prime central London it may have been of benefit for tenants to be able to review their rents regularly.

“The rental market is quick to adjust to a weak employment market and falling incomes. This is evident during times of financial stress” she has told LAT.

So for example, she has data to show that typical central London rents fell significantly during 2003-4 and again through much of 2009 and 2010 as local economic circumstances worsened.

“During these periods tenants, even in the outperforming central London rental market, would have been better off opting for rental reviews” Foxley says.

She believes that it is a mistake to cap rents or fix tenancies for longer periods for investors and landlords, too. “The residential sector is popular amongst life and pension funds, not just because of the superior returns it has recorded over the long term, but also because of its ‘liability matching’ qualities” she says.

“The fact that rents are highly correlated with incomes appeals to both tenants and the very investors that governments of all flavours wish to attract.”




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