Can we encourage longer tenancies without harming landlords?

The UK Government is working on policies to try to make tenants feel more secure in privately rented homes. While this is a matter that certainly deserves government attention, the recent consultation on the topic is already showing a skewed understanding of the situation. It’s going to be a challenge to deliver a long, secure tenancy agreement without burdening private landlords. The question is, can the Government strike this balance?

Longer tenancies

One key proposal from the Government is a new renting model based on a 3-year tenancy with a 6-month break clause. The main drive for the move is a perceived desire among tenants for greater security. In particular, the Government consultation cites statistics from Shelter which state that 43% of renting families with children worry about losing their current home.

Removing this fear is clearly important. I’ve already discussed how a more open dialogue between landlords and tenants would benefit both sides and could perhaps help in this regard, but it seems the Government believes more can and should be done. In this case, they argue, having a contract for at least three years would give tenants this security (after the six month break clause), while still allowing landlords to evict problematic tenants.

Obstacles for landlords

The National Landords’ Association (NLA) has been vocal in its opposition. They argue that longer term tenancies for landlords will make it harder to remove tenants who breach the terms of their tenancy. This is because it effectively removes access to Section 21 evictions, which allow landlords to remove tenants once a fixed-term tenancy agreement has ended.

The NLA also believes that longer term contracts could lead to an even worse situation for landlords and tenants alike. They are concerned that break clauses will encourage landlords to end tenancies before they enter into the longer fixed period, when evicting tenants becomes much more difficult.

Alternative approaches

One particular statistic struck me in the report. 70% of landlords say that improving the Section 8 process for regaining possession would encourage them to offer longer tenancies. This suggests that perhaps landlords can be helped into a situation where they feel able to offer longer tenancies, rather than being forced into a new system that simply demands longer tenancies.

Given the continued scrutiny of and opposition to Section 21 evictions, it may be a sensible time for the Government to consider strengthening landlords’ rights to repossess, reuse or sell their properties when they face difficulties of their own. In an uncertain economic climate, everyone needs stability; if landlords feel they have laws that protect them from the most damaging losses, they may be more able to share that stability with tenants.

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