The Government recently published its Renters Reform bill. The Housing Secretary, Michael Gove, is reported as saying “Too many renters are living in damp, unsafe, cold homes, powerless to put things right, and with the threat of sudden eviction hanging over them.”
What’s in the bill?
The bill proposes to end no-fault evictions and to prohibit fixed-term tenancies.
No-fault evictions, introduced in the Housing Act 1988, allowed landlords to repossess properties without giving any justifiable reason, using a so-called Section 21 notice. The intention was to give the landlord the confidence to let their property while knowing that they could repossess it at any time if they needed to, for whatever reason. This has led to much criticism over the years, as the landlord’s security means that the tenant feels permanently insecure. If a tenant asks for a repair or complains, the landlord can use this as an excuse to issue a Section 21 notice. Not infrequently the evicted tenant, having had to find alternative accommodation, sees the property re-let at a higher rent than they had been paying.
A fixed-term tenancy, also known as an assured short-hold tenancy, is set for an agreed fixed time, which can then be extended by agreement. This gives the tenant security for the fixed term. The landlord, on the other hand, cannot decide before the end of that fixed term to end the tenancy. A private landlord who might want to sell the property into a rising market, for example, would have to wait until the end of the term.
How student tenancies work
Fixed-term tenancies are the norm for student tenancies. David Patey, who has been involved in student housing since 1987, is the managing director of Heathfield Student Community Home, a privately-owned hall of residence in Norwich for 44 students attending the University of East Anglia and the Norwich University of the Arts. He explains, “Students living at Heathfield sign a fixed-term tenancy agreement for 46 weeks, a commonly used tenancy period in student halls of residence. Our residents can opt to extend their tenancy over the summer, but only to the end of August, so we can be sure the room will be available for a new tenancy on 1 September.”
“It’s hard to be a good landlord!”
David says, “It’s hard to be a good landlord! Buildings are complicated and need to be properly maintained, which costs money and requires expertise. And people are complicated, so you need to be attentive to their requirements. There is already a vast and complicated legal framework for renting, and it has not delivered safe, warm homes and empowered tenants.
“I’m a member of the ACORN union, which among other things campaigns to defend the rights of tenants. I know from the experience of fellow members that landlords often do not know their duties and tenants do not know their rights under the existing law. And councils do not have the resources to enforce the law. So I support the bill’s objectives and look forward to seeing how it will be implemented.”
What should the rented sector look like?
“If you really wanted to reform the rented sector,” David comments, “you would replace the landlords who are in it for a profit with social landlords.
“The whole purpose of a social landlord is to provide a home. They exist for the benefit of their tenants.
The whole purpose of most private landlords is to extract a profit. Their tenants pay for the benefit of the landlords.”
Student tenancies: a difficult balancing act
David explained that Scotland has already ended fixed-term tenancies: “The clear result has been higher rents and fewer properties available to students. This is because the new rules mean tenants can give two months’ notice and leave, so landlords do not know if students will remain long enough to meet their business’s income target.
“But tenants can also stay on if they want to, so landlords do not know if the room will be available in time for the following academic year. That means they cannot offer the accommodation to the next cohort of students with confidence. There is uncertainty about both revenue and availability.”
Protecting students’ budgets
“We are concerned that ending fixed-term tenancies will have a similar effect for students in England. When the House of Commons Select Committee reported on the proposed Bill they recommended that fixed-term student lettings should continue.”
“At Heathfield,” David explained, “We work really hard to keep the rent levels as low as possible. We have to be confident we can cover our costs. Our aim is to provide students with good quality yet affordable accommodation – university is expensive enough as it is. If we, as landlords, lose the security of the fixed-term tenancy, that could mean we have to push up rent levels to cover the uncertainty. We’re really reluctant to do that.”
Article based on a press release from David Patey.
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