Most housing associations look set to adopt fixed-term tenancies but does this mean they are bucking their social purpose and will tenants want to let go of their homes once their time is up? Nick Duxbury investigates
‘This policy is making us ask ourselves “what is our social purpose?”’
Brendan Sarsfield, chief executive of Family Mosaic, is musing over the introduction of fixed-term tenancies - a policy he says is causing the 20,000-home association to rethink some of its most fundamental assumptions about its relationship with its tenants and how it will operate in the future.
Despite the apparent enormity of the impact this decision could have on landlords, London and south-east-based Family Mosaic is in a minority of large housing associations, in that it has not yet decided whether to adopt fixed-term tenancies instead of the traditional lifetime tenancies for new tenants from next year.
A sample survey of 25 of the biggest associations in England carried out by Inside Housing last week found that 18 already plan to implement fixed-term tenancies. Three have rejected the policy and just four are yet to decide. Typically, the majority of these new tenancies will be fixed over five years. But three of the organisations polled, Home Group, Bromford Group and Trafford Housing Trust - which own 80,000 homes between them - have elected to introduce two and three-year fixed-term tenancies in some circumstances - despite the fact housing minister Grant Shapps said in June that these should be used only in ‘exceptional circumstances’.
When the government announced the plans a year ago, it did so in the hope short tenancies would lead to a higher turnover of properties so landlords could better address housing need.
The rationale is that tenancies for life disincentivise people to find work and fuel unsustainable dependency on a limited social housing resource. Under fixed-term tenancies, the government says, tenants will be more likely to improve their circumstances and leave the sector.
But tenants’ groups warn these new tenancies could damage their relationship with their landlords and break down stable communities. Lawyers are also adding a word of caution, warning that fixed-term tenancies could be difficult to implement and leave landlords vulnerable to costly legal challenges.
So, have associations properly considered the risks of embracing fixed-term tenancies on their businesses, their tenants, and their very reason for being?
Mr Sarsfield believes few associations have fully considered the implications of adopting fixed-term tenancies, especially the practical hurdles of implementation.
‘There are some huge challenges - and I don’t think this has been properly thought through by many organisations,’ he says. ‘We have to be very clear about when people can stay and when they should go. People [tenants] don’t share all the facts about income. How do you make sure people look after the properties?’
Joanne Young, associate solicitor at law firm Ashfords, agrees. ‘I suspect that associations have not sat down and thought about it properly,’ she says, adding that making fixed-term tenancies - especially two and three-year tenancies - work will be demanding on associations’ resources because they will have to serve notices setting out their intentions six months before they end.
These notices could be challenged by tenants, and this process could take a long time. ‘The criteria will have regard for the local housing strategy and I don’t think many people will have given it much consideration,’ says Ms Young. ‘It will be a shock to those on the ground that have to implement these tenancies. It is a resources issue.’
Landlords that operate in several local authority areas will have to know each council’s housing policy ‘like the back of their hands’, she adds. They will also have to know their tenants’ circumstances extremely well. If they don’t, then they will find themselves open to all kind of legal challenges. We have seen it before in succession cases proving that a property isn’t too big for a tenant’s needs. This all takes time and money - I can’t see how it won’t cause a problem.’
Paul Tennant, chief executive of 34,000-home Orbit Group, is unconcerned by Ms Young’s warning. Orbit plans to push ahead with five-year tenancies in some circumstances, though it has yet to decide what these might be.
‘We need solutions - not reasons not to do things,’ he says. ‘We agree with the idea that you need flexibility in your portfolio. There is such demand in housing that we need to do something; the housing market is not working. If you combine it [fixed-term tenancies] with other policies, then it may work.’
To ‘provoke debate’ on the subject, Family Mosaic researched earlier this month whether fixed-term tenancies would achieve the government’s goal of moving tenants out of social housing. It found that of 89 tenants who had lived in Family Mosaic properties for five years, just 10 per cent would be financially able to move out of social housing. However, this group did not want to move.
Similarly, another piece of research carried out recently by the Tenant Participation Advisory Service suggests tenants are largely opposed to the plans (see box: Tenants’ views). A survey of 200 of its members found 77 per cent of respondents were against the ending of lifetime tenancies and were fearful about what it would mean for the future. Interestingly, not only did the majority think the policy was flawed, but 81 per cent felt it was less likely that family networks and local communities would be strengthened as a result of plans. And 77.6 per cent of respondents said the proposals would make it less likely that tenants would get involved in helping to deliver public services in their area.
‘Tenants won’t have or make any investment in their communities if they know they could be leaving them,’ says Michelle Reid, chief executive of TPAS. ‘It will certainly impact tenants’ willingness to get involved.’
Michael Gelling, chair of the Tenants’ and Residents’ Organisations of England, agrees that the introduction of fixed-term tenancies could be damaging.
‘If landlords are doing this without consulting us, then it is just patronising,’ he says. ‘It is an erosion of tenants’ rights. If we want to move to the private sector or to homeownership then it should be our choice - not imposed on us. Short-term tenancies could destroy communities.’
Unlike Family Mosaic, Mr Tennant says Orbit Group is not consulting its tenants on the advent of fixed-term tenancies - although he points out the decision will go before its board, which has tenant representatives.
He is, however, sympathetic to Mr Gelling’s argument and stresses that tenants will not be booted out of their homes when their tenancies expire if their circumstances have not improved. He is employing a review process ahead of tenancies expiring and thinks most landlords will do the same to be flexible enough to help tenants rather than simply telling them to leave. The average Orbit tenancy, he says, is five years anyway. ‘I am not convinced organisations always expect tenants to move on at the end of the tenancy,’ he says. ‘Why would you impose that on people against their will?’
77 per cent
proportion of Tenant Participation Advisory Service members opposed to the ending of lifetime tenancies
79.5 per cent
of TPAS members polled say landlords should not be able to limit the length of new tenancies to as little as two years
81 per cent
feel fixed-term tenancies will not strengthen family networks and local communities
77.6 per cent
think fixed-term tenancies will make tenants less likely to get involved in delivering public services in their area
62.2 per cent
of respondents disagree with the idea that fixed-term tenancies will increase the number of new homes available for those in housing need
60 per cent
think landlords will consult them before agreeing a policy on fixed-term tenancies