The Department for Communities and Local Government will soon be launching a new ‘family friendly’ model tenancy for people renting privately. The government hopes that this new model will encourage landlords to offer longer tenancies.
In 2012, Shelter called for the introduction of a new renting contract to give greater stability to the growing numbers of people who rent their homes from a private landlord. We hope that, over time, our proposal – or something like it – will replace old-fashioned 12 month assured shorthold tenancies. So, using the principles in our Stable Rental Contract as a test, what should we look for in the government’s new model?
1. A genuinely longer tenancy period – according to the English Housing Survey, renting families are nine times as likely to have moved in the last year than families who own their homes. It may sound obvious, but for a tenancy to be family friendly it must be based upon a longer period of security, so that families are able to plan for their future. Five-year tenancies would also give landlords more security, reducing periods of vacancy and lost rent.
2. Limits on rent rises to avoid eviction by the backdoor – longer tenancies require limits on rent increases during the tenancy. Without these limits, a landlord could effectively end the tenancy simply by doubling, or tripling, the rent. We think in-tenancy rent rises should be limited to inflation, so renters can have greater predictability about the costs of renting.
3. Ceilings on rent increases, not programmed rent rises – limits on rent rises shouldn’t imply rent increases being locked in.. Rents typically rise more slowly for long-term renters, who are valued by landlords for the reliability and stable income they bring. Renters and landlords should be able to continue to mutually agree rent levels below the maximum amount allowed in the contract.
4. The opportunity to terminate the contract – while families need much more stable tenancies than are typically available now, they will still require the opportunity to end their tenancies early, so that they are not trapped if their circumstances change (for example, if they lose their job or need a bigger home). We know that many renters would struggle to pay their rent for more than a few months if they fell ill or lost their job, so renters should be able to give their landlord two months’ notice to end their contract.
Similarly, landlords need the flexibility to sell their property if their circumstances change, and effective processes so that they are not stuck with people breaking the terms of their contract. We proposed that landlords could terminate a contract if they needed to sell the home, and we want to see steps taken to renew landlord confidence in the courts. This would enable landlords to issue longer tenancies, in the knowledge that they won’t be unfairly stuck with a tenant who breaks the contracts conditions or doesn’t pay the rent.
5. The ability for renters to make their rented property a home – at the heart of the Stable Rental Contract was the principle that families should be able to settle in their rented property, and make it their home. This would be good for renters and good for landlords, who would benefit from tenants who treat their home with even more care. Currently, many contracts include clauses that do not allow renters to paint the walls or hang pictures. Renters should have the right to do minor decorating as long as they leave the property in the condition they found it in.
It’s vital that these five principles are all seen as part of one product, rather than as a shopping list of nice-to-haves. They are designed to work together and wouldn’t have the desired effect if they were implemented independently of one another. For example, without the opportunity for renters to terminate their contracts, families could become locked into a tenancy they can’t afford if their circumstances change. This would be harmful for renters and landlords alike.
While the government’s publication of a new model tenancy is a big step in the right direction, it’s essential that none of these key principles are left out.