Breakthrough in buy to let lending as Nationwide allows three-year tenancies

In a breakthrough in buy to let lending criteria, The Mortgage Works has extended the maximum length of tenancy it allows landlord borrowers to offer from one year to three.

Previously, TMW – the buy to let arm of Nationwide Building Society – was aligned with virtually every other lender in allowing Assured Shorthold Tenancies (ASTs) of no more than 12 months. It will now allow ASTs of 36 months.

There has been growing pressure for landlords to offer longer agreements, including from Shelter and the London Assembly, which have expressed particular concerns about families with children needing the security of longer tenure.

TMW Managing Director Henry Jordan said: “According to Shelter, one in five families now rents rather than owns. Families are more likely to want longer-term tenancies to, for example, ensure continuity of schools, so giving our customers this option will bring greater stability to this growing market segment.”

Peter Lawrence at Lawrence Rand said that there is often a business case as well as a moral argument for longer tenancies.

He added: “I’m really pleased at Nationwide’s move, which I am sure will be copied by other lenders.”