Most lenders restrict buy to let borrowers by requiring them to offer their tenants a maximum contract of 12 months. By allowing customers the choice to offer longer term lets - up to three years - TMW's new initiative will not only bring greater flexibility to the private rental sector in the UK, it also has the potential to provide more stability to the increasing numbers of people who rent homes privately. With this change, the Society is hoping to expand choice and innovation in the private rental sector.
In addition to facilitating longer term tenancies, the Society is set to launch a comprehensive new online independent Landlords' Guide and the Nationwide Foundation has launched its new strategy aimed at creating decent, affordable housing for people in need.
Richard Napier, divisional director of mortgages at Nationwide Group, said:
"The private rental sector has grown and changed phenomenally over the last few years, with rising numbers of families looking to rent in particular. We want our buy to let customers to be in a position to be able to meet the changing needs of the market.
According to Shelter, one in five families now rent rather than own, so giving the option of longer-term tenancies will bring greater stability to renters.
To help fulfil Nationwide's pledge of helping 750,000 people into a home of their own over five years, we are developing innovative solutions to housing problems, and this development is another indication of that commitment."
Campbell Robb, chief executive of Shelter, said:
"This news is very welcome recognition that six or twelve month tenancies just aren't working for England's nine million renters. More and more families are now renting their homes, but all too often short tenancies mean changing schools, leaving friends behind and growing up with constant upheaval.
"With two-thirds of renters saying they would like the option of staying in their home long-term, it's encouraging that Nationwide is leading the mortgage industry to help make renting more stable. We look forward to other mortgage lenders following suit."
Longer-term tenancies are the latest in a series of initiatives by the Nationwide Group aimed at supporting the growing and changing private rental sector. The new option significantly contributes towards the Society's pledge of helping 750,000 people into a home of their own by 2017.
During July, the Nationwide Group will launch the latest in its range of independent and impartial guides, this time for landlords. The Landlords' Guide clearly outlines what is expected of landlords on matters ranging from tenancy agreements through to safety checks. The guide, which will be hosted at www.themortgageworks.co.uk, will be available to download onto tablets and smart phones.
In addition, the Nationwide Foundation has launched its new strategy which aims to create decent, affordable homes for people in need. The Nationwide Foundation's work aligns with the Your Home aspect of Nationwide's Citizenship strategy and includes:
Bringing empty properties into use as homes for people in need
Improving the living conditions of vulnerable tenants in private rented sector homes
Supporting alternative, scalable housing models which provide more affordable homes
