Has the CML changed its tune on longer tenancies?

The Council of Mortgage Lenders (CML) has backed the government’s recent housing White Paper and says there is an “increased appetite” among lenders to advance mortgages to landlords who accommodate renters on longer tenancies.

The White Paper sets out how the government is planning to create more secure, longer tenancies for families that would last up to three years and give people ‘the security they need to plan for the future’, Prime Minister Theresa May says in its introduction.

Although the initiative has encountered criticism from some quarters of the property industry including eMoov chief execute Russell Quirk, who described the White Paper as ‘recycled rhetoric’, it has been welcomed by most agents and consumer groups including housing charity Shelter.

The CML says it is keen to assist the government as it ‘works towards a market in which those renting can find a tenancy to suit their needs’.

“Lenders already contribute to the funding of private and social rented housing, as well as owner-occupation, so we welcome and are comfortable with the cross-tenure approach in today’s white paper,” says Paul Smee, the CML’s director general.

“We are now ready to work with the government, and with members and others, on the detailed implementation of these proposals. We want to play our part in developing a coherent, long term plan to deliver more housing and help ensure that it is durable, affordable and in the locations and tenures that people want.”

But the CML has come under fire as recently as last month for its members’ resistance to long-term tenancies. Up to half of lenders – research by Shelter revealed – are reluctant to sanction because, should the landlord default on the loan it would be difficult for the lender to then sell the property to recoup their loan by selling the property.

The National Landlords Association (NLA) also believes that lenders could ‘do more to help’ and that many landlords remain on inflexible legacy mortgages.