Long-term leases 'not good for landlords'

Landlords should try to avoid offering their tenants long-term contracts as it can mean rental incomes start to fall behind the market average, an industry expert has said.

Speaking to the Times newspaper, Virginia Skilbeck of Douglas & Gordon, explained that even contracts which take into account inflationary rises might not produce the rising yields landlords would hope for.

She explained: "Our advice to landlords would be not to commit to a three-year term with retail price index increases, as usually the rents will fall behind what the property could be achieving on the open market."

Recent reports have suggested that demand from students and migrant workers will continue to push up the rents landlords can charge, making it even more important that they keep their options open with shorter rental agreements.

A study from Shelter said that landlords who provide houses in multiple occupation (HMOs) are providing a vital service to people who might otherwisenot be able to afford housing.

The charity's chief executive, Adam Sampson, explained: "As rents continue to spiral, HMOs provide a vital affordable housing option for many people who would otherwise struggle to find a home."