Cabinet split over tenancy reform

Sep 07, 2018 4:24 PM

On Wednesday, the Sun reported that 10 Downing Street and the Treasury are blocking moves to legislate for longer tenancies.

Although the recently closed consultation left open the question of making the new tenancy mandatory or voluntary, the same newspaper had previously reported that the Housing Secretary, James Brokenshire, wanted all tenants to get it.

That sets up a big internal government battle over tenants' rights as the Conservative Party worries more and more about winning over younger voters. 

The story prompted a question in the House of Commons from Labour MP Helen Hayes:

"This is of great concern to private renters in my constituency [Dulwich and West Norwood], including many families sending their children back to school this week who do not know where they will be living this time next year. Will the Prime Minister make a clear promise to private tenants that they will be entitled to three-year tenancies in law?"

Theresa May responded:

"We are keen to support tenants to access longer, more secure tenancies, while also obviously ensuring that landlords are able to recover their property when needed. The consultation on overcoming the barriers to longer tenancies in the private rented sector closed on 26 August. It considered the various barriers to longer tenancies and how to overcome them, and it did propose a new three-year tenancy model with a six-month break clause. We asked for views on the viability of that and how it could be implemented. We are now analysing those responses, and we will provide information on the next steps once we have done that."

A pretty unsurprising answer given that no government minister has yet said anything on record about what their preference is. But it is clear that there's support for concrete action on the Tory backbenches, with Will Quince (MP for Colchester) telling the Sun:

“Insecure tenancies are a leading cause of homelessness*, as well as causing anxiety for parents worried about their children’s schooling arrangements. Only by legislating can we ensure that landlords offer households the longer tenancies they want and give families the stability they deserve.”

It's worth pointing out that we are not huge fans of the government's proposal. Done right it would give tenants new protections from rent rises and evictions on spurious grounds, but three years is not enough to provide stability and tenants would still be screwed if the landlord wanted to move back in or sell. That's why we're demanding the abolition of Section 21.

What, then, are the reasons for opposing the Ministry of Housing's weaker proposals? The Treasury "fears it will scare off investment in property development" while aides in Number 10 "worry it would be defeated in the Commons by a handful of rebel Tory MPs". Both these claims are as flimsy as the chairs that came with my last flat.

The argument attributed to the Treasury is atrocious. Landlords who buy new homes will generally be pretty comfortable with longer tenancies. Indeed, many pension funds, which need a steady stream of rent, and therefore crave long term tenants, are building a lot of homes themselves to let on the same (or better) terms as the proposed 3-year tenancy. Dodgy landlords, who would consider evicting tenants for complaining, or to jack up the rent, and would therefore be inconvenienced by the government's model, are not in the market for new builds anyway (and the Chancellor would surely not want to appear to condone them). "Accidental" landlords, who might want to move back in or sell up at some point, are, by definition, not even landlords at the point they buy a property, so they won't be taking investment out of new homes either. 

The Number 10 advisers are right that there are plenty of backbench Tories who are hostile to tenancy reform, but it's not like Theresa May needs only Tory votes to pass her proposals into law. The model tenancy is practically a carbon copy of the one in the Labour Party's manifesto. As much as we would like both parties to go further and abolish Section 21, it would be odd for Labour to pass on the opportunity to deliver one of their election pledges. There are 11 million private renters in England - the electoral cost for a party that failed to stabilise their lives would be astronomical.

Renters need the government to be much bolder on tenancy reform. First, tenancies should be indefinite, as they now are in Scotland. Second, if landlords had incentives to avoid chucking out tenants - such as having to pay their relocation costs - then we'd see far fewer evictions and cases of hardship arising from landlords selling up. 

As we've shown, the arguments against making any changes are bogus, and the Prime Minister needs to hear this. Please write to your MP and ask them to tell Theresa May to act.


*As revealed by us