Ben Reeve Lewis concludes our short retrospective series on assured shorthold tenancies and the Housing Act 1988.
So here we are, a quarter of a century into the effects of the Housing Act 1988.
I’m not going to dwell on legal implications; Tessa and Samir have done that already. Just an individual heads up based on personal history and a bit of musing for the future.
In olden times …
I first hit the housing law world in the late 1980s as a homelessness case worker. We used to have people in bed and breakfast awaiting offers of council and housing association properties.
Back in those days, despite what we used to refer to as a housing crisis (How naïve) homeless applicants would get three offers of accommodation.
They would fetch up at the offer and say “It’s OK but it’s too near the main road”, to which we would respond “Hey don’t worry about it. Hang around and we’ll get you another one”.
A week later, offer number two would arrive on the desk, the response being “Yeah OK, but the kitchen is a bit small”, the response being…..”Don’t worry about it, wait for number three”, and so on.
Sounds so benign huh?
Change is ushered in
Around the same time that the three offer policy devolved into a single offer the Housing Act 1988 came into force, with its Assured Shorthold Tenancies and market rents.
Even lodgers weren’t immune. Prior to the HA 88 lodgers were known as “Restricted Contract Tenants” and were entitled to a possession order just like anybody else. That’s all gone.
But the worst effects of tenant insecurity ushered in by the AST that everyone knows and loves did not really kick in until 1997.
The pre 1997 assured shorthold tenancy regime
Sure AST’s came into existence on the 15th of January 1989 but they weren’t the default tenancy back then. If a landlord wanted to create one they had to follow a specific legal procedure and serve a thing called a “Section 20 notice” along with the tenancy agreement, informing the tenant that it would be a short let only.
The trouble was that back then few landlords even knew what a Section 20 notice was, so people in housing advice land rarely saw them.
One of the first housing law courses I ever attended was run by the defunct SHAC (remember them?) where the trainer was soon to be Judge Nic Madge.
I recall he drew a diagram on the flipchart of a hardboiled egg, with the white being assured tenancies and the ovum/yolk being the AST which Nic advised was government thinking that an AST would be a small, specialist type of tenancy agreement that only a few landlords might want to grant. Hence the legal requirement for a section 20 notice to validate its existence.
A short term, no fault eviction type of tenancy not being a landlord’s preferred option?????? Dearie me…..innocent times.
Shooting fish in a barrel
What this presented frontline housing workers with was an opportunity to shoot fish in a barrel. 99% of people presenting with assured shorthold tenancy agreements between 1989 and 1996 did not have section 20 notices attached.
So the adviser’s job was to simply advise the landlord and tenant that they had failed to create a fabled AST, and automatic eviction rights therefore went down the plug-hole.
Government realised this by the mid-1990s so with the introduction of the Housing Act 1996 (Feb 28th 1997) the section 20 notice was ditched and the default tenancy became the AST.
The situation now
So nowadays, if you have no written tenancy agreement then you will automatically be presumed to hold an AST.
THAT is when the wheels started to come off for tenants wanting security, not 1989. Things got pretty much unarguable after that time.
Section 20s still count, if you entered into your agreement before the end of February 1997, but it is a rare tenant who keeps ring binders and file boxes in strict order from that far back, so proving the existence of an old S20 notice is incredibly difficult.
I still manage it sometimes when I ask the landlord or their agent for a copy in a strategically vague way, as if it is of little import. Many weren’t even born then so are unaware of the necessity of it.
Housing advice worker 1: agent: 0.
Flexibility v. security
I completely understand why landlords like ASTs but I do get annoyed when I read politicians and landlord groups cite AST’s being popular with tenants who want flexibility.
Most tenants don’t want flexibility, they want a home where they can put down roots and raise their kids. Perhaps young professionals like flexibility but the age of private tenants is rising by the day and when you get older it is security that you want, not flexibility.
Although undeniably AST’s protect landlords from unscrupulous tenants, there is a knock on effect for the community as a whole. A couple of years back I read somewhere that every 3 years, 40% of PRS tenants have moved. How does this help children’s education or the sustainment of communities?
TIme to end the see saw
Can I float out a bit of a heresy here? And say, why not change the law to make it easier for landlords to get rid of bad tenants whilst at the same time stopping people losing their homes when they have done nothing wrong?
Yes I know this is a big, sweeping statement, it would require a major re-write of the law, involving pulling apart a lot of basic legal tenets but we created these laws, surely we can re-jig them?
Prior to the Housing Act 1988 the law was restrictive and all the toys were in the tenant’s pram. The ’88 Act reversed this, but surely, as we progress into the 21st Century we need a landlord/tenant legal system that works for both parties?
Otherwise the situation will continue to see-saw, where one party can’t see their interests being advanced without the other side being on the down-slide and we end up in a “Four legs good-Two legs bad” scenario.
Time then, not for a new law so much as a re-think about the needs of landlords and tenants in 2013. Neither the Rent Act 1977 nor the Housing Act 1988 offers much in this way. 25 years?….Jeez, time for a major reappraisal.
Interesting that you say every 3 years 40% of tenants have moved, as opposed to 40% of tenants have been served notice. What you need to ask is how many moved by choice?
In my experience the vast majority of landlords want – and indeed end up with – good, responsible, long term tenants.
The majority of our landlords and tenants (several thousand) are also very happy with the status quo.
If you’re always representing homeless people then perhaps it’s unsurprising you think there is a problem, but I would argue that you’re looking at the symptoms not the cause and that the law doesn’t need fixing.
Or maybe it’s just different in London and all the landlords there are money-grabbing misanthopists.
Last Friday’s second reading debate on the Letting and Management Agents Bill shows how far apart the political parties are on the issue.
Mr Rees Mogg believes that tenancy regulation acts as a disincentive for people to move to find work, restricts economic actvity, makes it difficult for people to move and damages the economy. It is suggested that the fixed AST is a flexible tenancy and allows tenants to move. This link is to Hansard; if anyone has an hour to read it.
http://www.publications.parliament.uk/pa/cm201314/cmhansrd/cm131025/debtext/131025-0001.htm#13102537000002
On the other side of the debate comment is made that further regulation will allow councils to target poor landlords; but at the same time notes that the present financial constraints on LAs hampers their ability to use existing powers under Protection from Eviction and HHSRS. So what is to be done?
Fixed ASTs either short or long term that commits a tenant to remain, in my view constrains them from moving to seek or take work elsewhere. It means that if they find what they beleive is a better tenancy with security of tenure they cannot leave early without a penalty. Whilst it may be inconvenient for a landlord for a tenant to vacate with notice, other than at the end of a fixed term, private letting is a business arrangement that should perhaps allow for voids and business losses. Council and social housing landlords have to manage void periods and to repair and refurbish a property if a tenant vacates with a month notice. If private landlords seek to be an alternative to social housing then perhaps they should have the same playing field and allow termination on a month notice, that would allow tenants to move if they need to do so.
Blimey in the chaos of my life I’d forgotten I’d written this. Lots of good arguments and thanks Jamie and Colin for raising these points (and causing my dinner to burn while I respond)
Jamie first.
“Interesting that you say every 3 years 40% of tenants have moved, as opposed to 40% of tenants have been served notice. What you need to ask is how many moved by choice?”
Sorry I should have collated this information more accurately but I recall it came via Linton Chiswick and a piece he wrote for Citywire. Feel free to research but it occurs to me that even if the move isn’t prompted by an eviction procedure it will most probably be caused by finances and the runaway rents in London have a lot to do with it.
Which brings me to your other point about the London Bubble. Yes it is a bubble but it exists nonetheless and affects so many people.
I strongly believe in a case for a separate London system and I don’t say that as a “Londonist” or even a tenant. Way back in the 1980s a concept called “London Weighting” was introduced for wages, based on the acceptance that it is more expensive living here than elsewhere in the UK. I think that logic still stands. London is not the rest of the UK and it carries with it a range of different peculiarities.
@Colin, you say “Fixed ASTs either short or long term that commits a tenant to remain, in my view constrains them from moving to seek or take work elsewhere.”
For me this argument goes way back to Tebbit’s on your bike idea of the 1980s, if you don’t like it move.
This is a simplistic equation and seems to be based on the idea that people’s homes, their families, their history and cultural development is reduced to no more than a financial consideration. That everything a person considers comes down to no more than money.
I should put my mum in a home because it makes financial sense….I should move to Poland because I can afford to live there.
One of my mortgage repossession clients was recently reduced to tears because a well-meaning friend advised her to sell the property because, as she put it, “It’s only bricks and mortar”. People’s homes are anything but bricks and mortar. We are human beings and we naturally form attachments. Even small losses can be emotionally devastating.
If our homes are to be simply reduced to matters of affordability then why doesn’t the government just create Nissan huts for everyone who can’t afford a home?
And therein lies the reason we’ll never see eye to eye on political issues.
While we continue to live in a capitalist system based on private ownership, our homes are absolutely a financial consideration.
Since the dawn of time people have had to travel to find work, or breadwinners have worked away from home and sent money back to the family. It’s how even modern economies work and mainland Europeans are still doing it. Why not us?
Why are you joking about nissan huts? The idea of cheap alternative housing is a good one in principle. Remember pre-fabs? They served a purpose in a time of need and some are still occupied today with happy tenants. What about the converted shipping containers we were discussing on here recently?
Tebbit’s view is no more simplistic than yours – a utopian paradise where everyone can afford to live where they like (or the more likely scenario of everyone living where they like because someone else is paying for it).
Ha, Jamie do you know what? I kind of find myself agreeing with you.
I am reluctant to comment on ‘Capitalist systems’ because to do so tars you with a ‘Communist’ brush and frankly, I am neither. I don’t think this is an either or argument, or that to disagree with a capitalist status quo automatically means you are a bleeding heart liberal. I don’t think the left has the monopoly on compassion, its tired rhetoric best left to the 1980s.
I work in an office full of Africans. Turks, Indians, Bangladeshis etc. and none of them comes from a culture where they had welfare benefits or a right to…….well….anything at all really and this reflects in their views of life which would often leave the EDL blushing ha-ha.
I have been watching the 1970s documentary series on BBC iPlayer and was interested in how the expelled Ugandan Asian immigrants, within 2 years of arriving and having lost their businesses managed to connect up and move on while the English far-right took to the streets protesting about the concomitant loss of jobs. The Asian community simply shrugged and got on with re-building their lives.
Also I see people taking on homes they can’t afford and later complaining that housing benefit is letting them down.
Having said all this I do think that homes should be a basic given, a place of security. The hoary but well-trodden logic of Maslow’s Hierarchy of Human Needs is a good model. Unless we have our homes and basic utilities sorted we can’t look to moving to the next level of development.
Whilst I understand the needs of PRS landlords and the difficulties in evicting difficult tenants I also see the dangers of retaliatory eviction and ASTs generally where a person can lose their home through no fault. This reduces people to the basic level of survival and my concerns are that the AST puts landlords into a position where their tenants can’t escape from the basic Maslow levels.
My question is, should we support a system that allows one group of society to hold a sword of Damocles over the heads of the other half for their own fiscal ends? Sorry about the Christian metaphor, I’m a Buddhist myself and we aint got an equivalent.
What we will always agree on though Ben is that you and your colleagues do a worthy and unenviable job, helping those who for various reason are much less fortunate than us.
The nature of your job means you’re always seeing the raw underbelly, the outcasts and those who the market has failed. But the reality is that this is still a small minority (albeit a growing one). There may be some retaliatory evictions but no system will be perfect.
I don’t think the majority of tenants feel they face the constant threat of eviction, but in answer to your question, I think the current system already gives the required flexibility. It’s a question of making sure tenants and landlords are aware of the different options.
To give you an example, most of our ASTs are offered on 2-5 year tenancies but the tenant has a break clause allowing them to give 2 months notice after 12 months. The landlord is tied to the full term. You can’t really say fairer than that and this is within the existing legal framework – you just need to change the mindset of landlords/agents, not the law.
Jamie
You say that your tenancies have break clauses after 12 months and that makes them flexible. Not so, if a tenant needs to move two three months after start of a tenancy – eg they have found work elsewhere; they need to move to look after elderly relatives; they are offered a social tenancy with security of tenure they are liable to you until 12 months. That is not flexible. From your point of view as a landlord in business your needs are to limit change. As I previously said social housing does have a right for tenants to terminate with a month notice and they can move (subject to availabilty to other social housing with security).
You mentioned the use of converted containers for the poor. After WW2 when the country had not built houses and so many properties had been destroyed, prefabs were provided (some were very cold) Then the Parker Morris standards were introduced in the 1960s to ensure that no person in council housing, despite their financial position had to live in housing below a certain standard. That was not socialism; it was accepted by all parties. That mass housing programme was undertaken despite the finacial constraints of the time.
As a relatively rich country (5th largest) economy that seems to me a reasonable proposition. The HHSRS sets similar standards for the private sector.
It has previously been posted that if the private sector can not provide similar terms and conditions(security of tenure and rent) then unfortunately the market may not be tenanble for families in particular although there is clearly a role for the young, students and 20+ seeking house shares or young couples.
I do not have any problem with private tenancies and much of my work was assisting landlords to understand their rights and obligations and to ensure that they did not unwittingly transgress the law and have me and my colleagues have to challenge them. Many of the tenants who consulted us were not necessarily the very vulnerable but for a variety of reasons found that they were in the private sector. Single people or couples without dependents can rarely access social housing since the mass demolitions of the last 10 years that has created greater reliance on private accommodation even though many would like the security of social housing if it could be found.
Oh come on Colin, you want tenants to have their cake and eat it!
On one hand everyone bemoans the fact that tenants don’t have security of tenure and then on the other your’re saying they should also be able to give a months’ notice at the drop of a hat any time during the tenancy!
Apparently all tenants would rather own a property than rent, but if they were owner occupiers they certainly wouldn’t be able to sell and move in a month!
What you are expecting is unreasonable and completely unworkable for landlords. Even in pro-tenant Germany, tenants have to give three months notice.
Social housing providers may well be in a position to let their tenant have their cake and eat it, but they are subsidised and non-profit making! For some reason whihc no one can explain to me, tenants of social landlords are even entitled to receive higher rate of LHA.
Subsidisie private landlords’ and I’m sure they’d agree to whatever break clause you want.
Just because the government won’t invest in social housing it does not mean PRIVATE business should be forced to operate the same way as housing associations to plug the gap.
Many landlords use S21 to remove bad tenants because of the certainty of (eventually) succeeding. S8 grounds can be defended or severely delayed by, often spurious, disrepair claims. So I do wonder how bad the problem really is but this got me thinking of what other reasons would cause a landlord to issue a S21 and I came up with the following:-
1) Retaliation.
2) The need to sell the property and a better price would be achieved with vacant possession.
3) Tenant is a pain.
4) ??? struggling now, maybe because I have never issued an S21.
Although not a fan of letting councils interfere I wondered if the planning system could be used to solve a lot of the S21 problem. If planning consent was required to go from owner occupier to rented property and vice versa the following conditions could be used to prevent many S21 evictions:-
a) Property use cannot be changed to rental use if its condition is below standard.
b) All rental properties to be inspected after an S21 notice is served and if below standard S21 is voided. (Would need safeguards against tenant sabotage).
c) S21 cannot be used on a property that does not have rental use approval.
e) Rental properties to be inspected every 5 years paid for by landlord. Inspection of a % of properties every year paid for by the council.
At the same time the S8 and abandonment system needs to be reformed.
I would also allow the possibility of tenancy agreements that gave tenants responsibility for some internal decorating and repairs.
An added advantage would also be that councils would be able to control the balance of owned and rental properties in an area if this was causing major problems.
I would exempt from the planning requirement, for a period of 3 years, properties that had previously been the landlords only property.