Longer Tenancies: Benefits, barriers and insights from the Government consultation

Last month’s announcement that the Government intends to abolish section 21 evictions and create open-ended tenancies rightly took the limelight, but alongside it was published the Government response to last summer’s longer tenancies consultation. As we all look ahead to the forthcoming reforms that will create a secure, open-ended tenancy, adjust legitimate grounds for eviction, and streamline the court process, it’s useful to dig back into the detail of the consultation responses to understand how tenants, landlords, and letting agents understand the barriers to and benefits of longer tenancies.

Here are some key take-aways from the consultation responses which should be borne in mind as the new open-ended tenancy and wider private rental market reforms are shaped.

Many landlords don’t understand that tenants want longer tenancies

79% of tenants responding to the consultation had not been offered longer tenancies, but 81% said that they would accept one if offered.  Yet three quarters of landlords hadn’t offered longer tenancies, with some commenting that tenants preferred the flexibility of short tenancies, or that tenants don’t ask for them.

Consultation Q13: What do you consider to be the main barriers to landlords offering longer tenancies?

 

Landlords

Tenants

Letting agents

Landlords do not want them

42%

64%

46%

Tenants do not want them

40%

14%

59%

The responses to this question show a real gulf between what tenants and landlords understand the other to want. A good landlord-tenant relationship is key to a stable, successful tenancy, yet it’s not surprising our private rental market is providing such poor outcomes for everyone when tenants and landlords aren’t on the same page with each other.

It’s fascinating that letting agents seem even less attuned than landlords to what tenants actually want in tenancy length. When you consider the role of the agent as an intermediary, it perhaps points to a factor in why the landlord-tenant relationship is often so bad. When letting agents are this far off the mark with what tenants want, and presumably in communicating this to landlords, it’s little wonder that that landlords and tenants fail to understand and trust each other in the current system. 37% of tenants thought that the agent’s advice was a main reason why landlords don’t offer longer tenancies, although only 8% of landlords and 11% agents cited the agent’s advice as a key barrier.

While not every property is let through an agent, moves to improve renting will require an understanding of how letting agents can affect the landlord-tenant relationship. Current government moves to professionalise and drive up standards in the lettings sector are very much needed to support a more transparent, honest, and trusting relationship between tenants and landlords.

 

Revenge evictions protections aren’t working

The consultation asked whether the protections against retaliatory eviction brought in by the Deregulation Act 2015 had been successful. Depressingly but rather unsurprising, 43% of respondents weren’t aware of the protections at all. Of those aware of protections, 62% thought they were unsuccessful. 75 respondents commented that the lack of resources for council enforcement, which kickstarts retaliatory eviction protection for tenants, are a key reason why the protections don’t work.

This echoes with research by Generation Rent and Citizens Advice that shows the widespread exposure of tenants to revenge eviction after reporting health and safety issues in their home. Requiring landlords to provide a legitimate reason for repossession is the best way to protect against revenge evictions but, before this change happens, councils need to protect tenants better from retaliatory eviction through their enforcement work.

 

Tenants receive eviction on legitimate grounds only and landlords get a streamlined court process

74% of landlords said that the main barrier to offering longer tenancies was the difficulty in gaining possession of a property through the court system, despite 53% saying that they’d experienced no difficulties in this area. While many landlords may not have bad personal experience of the courts, those that do experience long delays are particularly vocal about it, perpetuating a negative perception of the court process in the minds of landlords. Time delays should always be a necessary safeguard when evicting someone from their home, but there are also unnecessary delays in the process resulting from underfunding of the courts. In a trade-off for tenants receiving greater security of tenure and an end to section 21 eviction, the Government has committed to simplifying and speeding up the section 8 eviction process to give landlords greater confidence in the courts and to rent to tenants perceived as ‘risky’.

With the announcement of the Government’s intention to abolish section 21 no fault evictions, the argument has been won that landlords must be required to provide a legitimate reason to evict tenants from their home. This will bring us into line with most other European countries with thriving private rental markets, including Scotland. But what should those legitimate grounds for repossession be?

67% of the consultation respondents thought that legitimate repossession grounds would be the landlord selling the property, or landlord moving back in, in addition to the existing section 8 grounds which cover the tenant being at fault with rent arrears, antisocial behaviour, criminal damage, etc. The government has indicated that they will adopt these new grounds, but Generation Rent has, in the course of the End Unfair Evictions campaign, argued for additional protections for tenants evicted for landlord sale or moving back in: a longer notice period, a relocation payment from the landlord to the tenant, and safeguards to prevent these grounds being abused. It’s important to note only 39% of tenants actually felt that these were the right repossession grounds, with 27% of those commenting raised concerns about the sale ground being used to evict tenants only to then re-let the property. This highlights the need for safeguards and strengthens our case for a relocation payment to the tenant if evicted using the sales or moving back in grounds.

 

There is landlord support for weak rent regulation

Consultation responses showed clear support across the board for restrictions on rent rises, including from landlords and letting agents. While there was little consensus on what those restrictions should look like, in terms of frequency or by which metric to link to, just 12% of landlords said that there should be no limits to rent increases at all.

The Government has accepted that some rent restrictions are necessary to give tenants security from effective eviction through unreasonable rent rises. But, in designing rent regulation, the challenges are to avoid normalising annual rent rises, and ensuring that rents can decrease as well as increase. Yet as the Mayor of London explores rent control and tenants call for action on rents, it’s fascinating to see that there is landlord support for rent regulation at least in some weak form.

Consultation Q20: Do you think that there should be any restrictions on how often and by what level the rent should be increased in a longer tenancy agreement? And if so, what is the maximum that these restrictions should be? (Tick up to two)

 

Landlords

Tenants

Letting agents

Other

Total

Yes – rent rises should be limited to once per year

42%

14%

56%

38%

37%

Yes – rent increases should be limited to once every 18 months

2%

3%

1%

4%

3%

Yes – rent increases should be limited to once every two years

3%

18%

1%

6%

6%

Yes – rent increases should be limited in frequency but not in the amount that can be charged

8%

2%

8%

1%

6%

Yes – rent increases should be linked with inflation measures (e.g. Consumer Price Index)

11%

33%

7%

21%

16%

No – rent increases should not be limited

12%

4%

5%

2%

9%

Other

10%

17%

13%

20%

13%

 

In total, the eight-week consultation received 8,706 responses; 62% from landlords, 19% from tenants, 5% from letting agents, and 15% from ‘others’. A big thanks to all the tenants who responded to the consultation and made your views heard! There will be more opportunities over the summer for tenants to feed into Government on the detail of the new tenancy – make sure that you’re signed up to the Generation Rent mailing list so that we can keep you up-to-date with reforms and how you can support efforts to create fairer tenancies.  

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