Shelter Report:

Given its focus on the future of social housing, the bulk of Shelter’s new report, “Building for our future: A vision for social housing” understandably centres on the social sector, but in Chapter 8 the report sets out Shelter’s vision from private renting.

Given the depth of the problems faced by private renters, says Shelter, [it] “necessitates urgent action. Improvements to the private rented sector now will make a major difference for the increasing numbers who rent privately, including more and more families and older people.”

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Shelter is calling for permanent tenancies to become the legal minimum norm for all private renters.

Presumably these would be similar to those introduced in Scotland, where on the 1 December 2017 a new type of tenancy – the private residential tenancy – came into force, replacing the assured and short assured tenancy agreements for all new tenancies.

Shelter also advocates some form of rent control, plus a new consumer regulator, similar to the Financial Conduct Authority, which would be to register, monitor and enforce social and all those private landlords who are owners of more than 25 homes.

“Other countries have introduced regulation to make the market for private renting work better, but in England, the regulation governing private renting has not kept up with the breakneck expansion of the sector. Our current regulations are relics from a time when private renting was normally only a short-term option and for a small minority. They exacerbate the weak bargaining position that private renters are put in by the overheated market, and they put private renters at risk of exploitation. They need to be reformed,” says Shelter.

Shelter calls for a strengthening of private renters’ bargaining powers to place them in a better position to negotiate a deal for themselves. The biggest opportunity for change is, as Shelter sees it, the removal of the no-fault or ‘Section 21’ eviction – a reference to this section of the 1988 Housing Act that gives landlords the power to evict without a reason.

In most of our neighbouring countries, Shelter says, stronger legal protection against eviction puts private tenants in a much stronger position to push for a good rental deal. “There are legal protections against no-fault eviction and across mainland Europe.” And since December 2017, private renters in Scotland have been legally entitled to a permanent tenancy, where they can leave at any point with 28 days’ notice, but they can only be evicted if landlords have a legitimate ground for doing so.

Giving private renters in England a similar legal protection, Shelter advocates, would strengthen their bargaining power and make it easier for them to complain or challenge, without fear that it will result in them being asked to leave.

Shelter says that the government acknowledges that longer tenancies can provide a form of consumer protection, “ensuring that tenants can confidently make a complaint”.

A recent government consultation included new proposals for how to deliver longer tenancies to more private tenants, the result of which is yet to be announced. It is not yet clear whether the government’s proposal for a model longer tenancy would be voluntary or mandatory, but the broad terms would be:

  • three years in length, during which time tenants would be protected from no-fault eviction
  • landlords would only be able to regain possession where they are able to demonstrate grounds (like serious rent arrears)
  • the tenant would be able to leave at any time by giving two months’ notice
  • it would be subject to a break clause after the initial six months at which point either party would be able to break the tenancy
  • rent increases would be limited to one each year. How rent increases would be calculated would also need to be set out when the property was advertised

With a longer tenancy, families would have much greater certainty that they would be able to stay in their home for at least a while and reduce the risk of multiple moves impacting on their child’s education, says Shelter.

However, Shelter argues, while three-year tenancies would clearly be an improvement on the existing rental framework, any fixed duration will create a “cliff edge” and limit the potential benefit it will have. Hence Shelter’s argument that a permanent tenancy similar to the Scottish model would remove a fixed end date when tenants could fear recrimination if they raise a complaint.

The report goes on to suggest that to ensure that landlords have confidence in their capacity to legitimately regain possession (such as if their tenant goes into serious rent arrears), these legal changes could coincide with a review of court processes and resourcing.

Building for our future: A vision for social housing

15 COMMENTS

  1. Do these organisations realise that private landlords rent the properties that they have or are purchasing, of their own free will, not because they are under an obligation to. The private rented sector is just that, private, voluntary! If all private landlords withdraw their properties from the market, where will that leave these people who no-one else can help. There is no incentive now for private landlords, who is on their side?

  2. How big a problem are Section 21 evictions? It is always quoted as a problem for tenants but I have only ever used it once (when I needed to sell a property to buy my own home) and all my tenants either stay as long as they want or leave because they are moving on for one reason or another. Many my tenants don’t want longer tenancies and are quite happy as they are.

  3. I would have no choice but to sell everything as I would not be able to offer the properties to the next years students if I don’t know when the current ones are leaving.

    Every year some of my students ask to stay on for another few weeks so they can go travelling etc and keep the property as a base, have somewhere to stay for them and their friends and their parents at graduation etc in November. I would not be able to do anything to prevent this.
    Their visa expires 3 months after their course finishes so many would not vacate in time for the new students to move in before their course starts. This would leave me with empty properties until the following year.

  4. Agree. Also this takes no account of changes that private landlords may face personally or financially (as we all know interest rates rise, govt take more tax etc) so will changes be made so easier to sell with sitting tenants? Like many areas instead of sorting out the problem (crap landlords) they continue to penalize the majority to try to solve problems but in fact will only make things worse for tenants!

  5. I have been a landlord for six years and have five properties. I strive to keep them maintained to a high standard and have good relationships with my tenants. It makes financial sense to to do and I get pleasure out of providing a good service. During that time I have never evicted a tenant, never raised the rent except between tenancies and never witheld any deposit money despite always needing to refurbish between tenancies. However I am reassured that I could do those things should I need to. The obvious reasons for Section 21 evictions are to sell the house or because there is a problem with the tenant and you just want them to go with as little nastiness as possible. However, the amount of financial, legislative, political and social pressure being exerted on the private rental sector is becoming overwhelming and it will only take a small straw to break the camel’s back.

  6. So landlords will be only able to evict tenants after they have racked up serious rent arrears. Perhaps the nice man at the bank will let me off paying my mortgages on my buy-to-let portfolio whilst these “serious rent arrears are racking up”. Absolute disgrace. Who does shelter think we are.

  7. No good landlord goes around chucking out its tenants at a whim. There is always a good reason . Landlords want an easy life with good tenants treating their property with respect and as if it is their own home. Setting out legislation which takes away a landlords ability to protect its assets from abuse will lead to a shrinkage in the private rental market.
    The government should ask themselves who will fill this gap & shelter might just find they have a bigger problem on their hands
    Remember we are not the enemy!
    If you make life too difficult for us we will simple walk away and invest elsewhere

  8. Maureen. That is exactly what Shelter want, rid of private smaller landlords. Look who pays Shelters bills?? Grainger property – one of the largest private landlord companies in the UK. Kill the small landlords so they can take over is the constant message from Shelter/Grainger

  9. What happens when the private landlord’s circumstances change and they have to sell the rented property, the tenant cannot buy it, and vacant possession is required for the sale? This puts an unacceptable stress onto the private landlord, who would not be able to ask their tenant to move out. It would soon phase out most private letting.

  10. Like all these things (government or tenant interest group driven) it is a one sided attempt to change things in purely favor of the perfect tenant while giving nothing in return. For some years I ran an office in Holland where the people who worked for me rented there. Under Dutch rules at that time the government inspector visited the property before the tenant moved in, photographed and detailed everything to make sure it was a decent standard for the tenant. When the tenant moved out the inspector again visited and everything had to be returned exactly as it was so tenants redecorated etc to the same standard (for the landlord) before they left and arrears had to be repaid. The government knew where the tenant was working and would if needed stop the cost of repairs etc from their wages / benefits. If the landlord didn’t give a proper service during the tenancy repairs could be ordered by the inspector, if the tenant misbehaved the landlord could report it to the inspector who if necessary could arrange eviction. I don’t know if it’s still like this in Holland but it did seem to work very well at the time. I’ve been renting out property for many years, at one time I had 30 houses and I’ve generally found only 1 in 20 tenants is a real problem but getting rid of them can be a nightmare, forget recovering any costs for damage. Even in easy cases, (with no arrears) if it looks like there would be a need to withhold the deposit, they text to say they have stopped their standing order and I can use their deposit as their last months rent. A government intermediary would go a long way to solving this problem and it would be much harder for real problem tenants to use a different name and trash another house.

  11. I am afraid the increasing legislative interference of the government regarding the private rented sector is due to political reasons. It has become a battling ground for votes and it is “electorally sensitive”. Knowing that Labour holds all the aces in this game the government has no chance but to forget any resemblance of balance and justice and it has become itself a lobbyist for the renters. It absolutely disgust me the level o hypocrisy exhibited by politicians (including labour MPs) most of who are landlords themselves. They seem absolutely oblivious to the nightmare of getting rid of a bad tenant particularly if you are not a wealthy landlord. The picture they want to paint is that of the poor innocent tenant being at the mercy of evil landlords rescued by a wise and caring legislator. That’s how you solve a problem of basic supply/demand mismatch: throw legislation at it! At the end everyone will loose; particularly the poorest tenants. Section 21 was introduced to encourage property owners to put it on the rental market. Now we are witnessing the opposite: the forced transformation of private landlords into social landlords using the law as a gun substitute. In the long run there is only one benefit in sight. There will be a strong incentive for wealthy individuals to stop accumulating property, more properties will be put for sale which will push prices down and will help those in the middle who may be able to buy one. For those tenants however not able to buy it’s going to be a bloody nightmare.

  12. Lets go back to the good old days of the 1977 Act, because that was a great success wasn’t it. More drivel from Shelter as usual. That’s where their insane policies are trying to push us, and this idiot Gov’t keep listening to them.

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