Fixed term tenancies failing on everyone’s terms
8 Mar 2016
The government’s plan to remove security from social tenants and restrict tenancies to 2-5 years will hopefully get the scrutiny it deserves this week. Peers are set to debate the controversial new clauses as the housing and planning bill winds its way through committee.
Shelter is concerned that constantly churning people through social housing will be hugely destabilising to families and communities. But new research also suggests that the reform will fail even on its own terms of ‘making best use of stock’.
Research suggests that rather than freeing up council houses, families could undergo the stress of reassessment only to be re-allocated their home. The government’s proposal for 2-5 year tenancies followed by an assessment is modelled on the approach taken in Australia in the noughties. A decade on, in practice nearly all fixed term tenancies have been renewed, meaning very few homes have been freed up for households on the waiting list.
Now new research shows that early adopters of fixed term tenancies in the UK have also become disillusioned with them because they have proven to have limited scope to free-up social lettings. The researchers concluded that landlords were also sceptical that short-term tenancies were effective in increasing social mobility or shaping household’s behaviour.
Such scepticism explains why only a minority of new lets have taken advantage of the discretionary power to offer fixed terms: in 2014/15 just 13% of new general needs social lets were on a new flexible tenancy. Landlords have voted with their feet and preferred to continue to grant their tenants security. In response the government is legislating to ban councils from providing security of tenure.
So is the government’s amendment really so toxic if it looks like the majority of tenancies will be renewed? We’d argue yes. The government’s insistence on reviewing everyone, even households with long-term health needs and disabilities, to see if their circumstances have changed seems unnecessary onerous and will cause bureaucratic cost for landlords and unnecessary stress for tenants.
Research into early use of fixed term tenancies in England found that the majority of households were anxious or concerned about their lack of housing security. Families with children, older people or people with disabilities and long-term health problems tended be most anxious about their long-term prospects.
This is completely understandable. Many people on low incomes are realistic about their prospects of purchasing property, despite the aspiration to own one. Only a quarter of current social tenants say they expect to ever be able to buy. Losing a social home would not propel them into social mobility but relegate them to a lifetime of insecurity in the private rented sector.
Landlords will be able to give scant reassurance to households, as they will have to go through the bureaucratic, costly and intrusive process of reviews before they can say with certainty that a household will be allowed to remain in their home. The ban on security of tenure is an example of policy being damned if it works and damned if it doesn’t. Whatever happens to the roof above their heads, households will have lost the essential security of knowing they can call a place home.