Citizens Advice Salford
Response to “Overcoming the Barriers to Longer Tenancies in the Private Rented Sector”:
Salford Citizens Advice, based in the heart of the Greater Manchester city-region, provides services to around twenty thousand people each year; and of these some 955 have approached us for help over private sector tenancy problems. Within this category the greatest problem is inadequate security of tenure – which also contributes to a weakness in people’s ability to seek remedy to disrepair issues – and in our view, also contributes to disproportionate rent inflation over time.
Whilst we welcome – in part, your consultation, we feel it does not go far enough.
Method of Change:
We feel that in order to avoid a very confused position on the behalf of tenants and landlords both, these proposals should be legislated for rather than promoted through codes of conduct, kite marking schemes or tax incentives.
We take the view that it is better to give rights rather than good practice advice, as rights can be enforced more readily.
We note the private rented sector’s importance as a share of all housing tenure has increased since the current, we believe, inadqaute tenancy forms were introduced.
Length of tenancy:
We note the comparisons you have made in your paper with the recently reformed Scottish Law system, and are not sure if you have been able to make a case for such a great divergence between what you propose to be a new system in England. We cannot see any reason why a tenancy should not operate under an indefinite lease length, with the tenant giving notice for any reason but the landlord only doing so on limited prescribed grounds.
We note your list of ‘Scottish grounds’ in appendix C.
We in particular feel that your suggestions of a ‘probationary’ period approach has the major risk of creating a significant loop hole for even more insecure tenancies. It is our view that some landlords will take a ‘revolving door’ approach to probationary tenants.
Similar concerns also arise for us in your proposals to exempt certain categories of tenants (for example, students) or certain categories of accommodation (for example, holiday lets) as we feel these provisions risk encouraging avoidance strategies. We do, however, feel that indefinite tenancies can be granted, where surrender is expected to be less than a year. There is some merit in a system of extended ‘licence to occupy’ for those very short term categories that might justify the need to be treated differently.
We note that many other territories – other than Scotland, use indefinite or much longer tenancies than you proposals. We also note that this longer term is often quoted as being a reason for why these countries have better performing housing markets in more general terms.
We think that improved security of tenure will also have broader social benefits, in terms of greater neighbourhood stability, improved social cohesion, better educational attainment by virtue of less school moves, a reduction in the numbers presenting as homeless to local authorities, and better health as tenants will be better able to take action against poor housing conditions without risking retaliatory eviction. An increased ability to enforce repair obligations will, over time, lead to an improvement in the quality of the standard of the private rented sector stock.
Better regulation of rent levels:
We reject your view that rent regulation does not work or that it was the reason for a previously smaller private rented sector before the changes in 1988. The entire housing market is very different – with much changed council housing in both scale and tenure, an enhanced role for other sorts of ‘social housing’ providers (the manner in which housing associations, and other quasi-public bodies manage what was once more clearly publically owned housing) along with the significant change within the owner occupier sector – all of which impact within the context of a much ‘hotter’ housing market where pressures of poor supply act to further pressurise market performance.
We have enclosed a copy of our recent report ‘The Housing Question’ produced in February 2017 which gives more detail.
We think that some broadly inflation linked and capped approach to rent reviews is the best way forward – for both the tenant, who can plan better; as well as for the landlord investor, who will enjoy a more stable return through more efficient market operation.
We note again the Scottish approach of allowing local councils to determine ‘rent pressure zones’ – where rent control is permitted. We think that this approach might be a useful compromise between an automatic CPI approach – and one which supports a reasonable return to new landlord investment. (In fact this more stable CPI+ could well be a very attractive investment tool for long term investment funds more generally, although the ’+’ has to be modest.)
We think that the previous efforts to control rent levels by capping housing benefit levels is too crude an approach, as well as not being effective, in terms of costs saved. It also places too great a portion of the reduction on the tenant.
Improved landlord registrations schemes:
We think that this is an excellent opportunity to look at increasing the role of expanded local authority powers to introduce land lord registration – very much in keeping both with your thoughts around the use of kite marking but also as a strategy for ensuring housing markets are influenced locally rather than through central government efforts. We think local authorities – either working alone, or with partner local authorities are much better placed to understand the pressures on local housing markets. We think that the current system of expanding compulsory land lord registration is too weak because of the tendency of central government either through ministerial control or civil servant control disinhibits the developments of new controlled zones.
We also note the Greater Manchester Mayor’s call for further devolution around the area of landlord registration.
Citizens Advice Salford.
August 23, 2018.
Enc. ‘The Housing Question’ (A review of the working of the private rented housing sector in Salford).