Government U-Turn On Fixed Term Tenancies
The government won’t make fixed term tenancies mandatory but has stressed the need for on-going flexibility in tenancy terms.
Communities Secretary James Brokenshire confirmed the government’s stance in a written statement saying: “After listening carefully to social housing residents, we are proposing not to implement the provisions in the Housing and Planning Act to make fixed term tenancies mandatory for local authority tenants at this time. We recognise the benefits of fixed term tenancies in the right circumstances to help social landlords make best use of their housing stock and that flexibility will remain.”
“But we remain keen to ensure that victims of domestic abuse do not risk losing their lifetime tenancy if they are granted a new tenancy after fleeing abuse. We will bring forward new legislation to ensure that councils honour their lifetime tenancy in these cases.”
In July, Brokenshire announced consultation that proposed the introduction of a minimum 3-year tenancy term, with a 6-month break clause, to help renters put down roots, and give landlords longer-term financial security. The 3-year model was one of a range of options on the future for tenancies. According to government data, people stay in their rented homes for an average of nearly 4 years. But despite this, 81% of rental contracts are assured short-hold tenancies with a minimum fixed term of just 6 or 12 months.
Under the proposed longer-term agreement, tenants would have able to leave before the end of the minimum term, but would have greater protection if they wanted to stay in a property for an extended period of time. At the time, Brokenshire said it was “deeply unfair” when renters are forced to uproot their lives or find new schools for their children at short notice due to the terms of their rental contract.
Simon Heawood, CEO and founder of Bricklane, branded the turnaround “baffling” when three-year tenancies were better for both landlords and tenants. He said: “Forward thinking landlords like us are already offering three year tenancies as standard, for commercial reasons.”
“Giving tenants more security is not only right, but also generates better financial returns for investors. Our customers value the fact that tenants are able to feel at home, without compromising investment returns, or having the responsibilities of being a landlord themselves,” he said.
The social housing green paper outlined allowing councils to continue to have choice over their use of fixed term tenancies as one of its core principles. Future legislation is expected to put in place protections for lifetime tenants who have suffered domestic abuse. Meanwhile, councils are “strongly encouraged” to consider the welfare of victims of domestic abuse, by ensuring such tenancies are granted on a lifetime basis.
