Would tenancy plans leave no room for improvement?

Tomorrow’s world should see a ‘fundamental shift away from the majority of current lets that provide a largely static tenancy for life’, the Chartered Institute of Housing’s proposal states.

Instead of applying a coat of paint to the existing system, the institute wants to present tenants with a whole new canvas.

Before moving into their home tenants would sign up to a system of ‘flexible tenure in which all new lets can be reviewed after a set period of time’.

The government would then create a ‘range of options for individuals’ that would alter according to their circumstances, the CIH proposal says.

Tenants whose circumstances – for example a low income – had not improved or got worse would be given help and support if it wasn’t already in place.

But it is what happens if a tenant’s circumstances improve that has caused the most debate.

If this improvement was considered sustainable, the CIH suggests it would be ‘right and fair that there is a menu of options to choose from, but that the existing terms and conditions [of the tenancy] are not an option’.

The CIH proposal makes four recommendations about what should happen next. The first three would see tenants given help to move into low-cost homeownership, advice about moving into the private rented sector or a move into full homeownership.

Tenants who said ‘not for me, thanks’ would face a change in the terms and conditions of their tenancies, which could see their rent hiked up to around market levels.

Richard Capie, director of policy and practice at the CIH, said it was important for the sector to debate the issue.

‘We need to look much more at people on an individual basis – should a rent increase be considered for someone in low-paid or variable employment? Of course not.

‘Should it be considered for someone who has moved into a good secure job and could afford to pay a bit more towards what is a sub-market rent? If you are on a good income is it fair that you should have such a level of subsidised rent?’

Mr Capie added: ‘We need to be clear that we don’t want to create a disincentive to do well and make clear it shouldn’t be the only option – people who wish to own should be able to have support to save. But let’s not be afraid to have that debate.’

Abigail Davies, head of policy at the CIH, said any change to the terms and conditions of a tenancy would probably only take place after someone gained ‘quite a significant level of income’. ‘Access to social housing isn’t means tested,’ she said.

‘Access to intermediate and shared ownership kind of is. We know what people can afford in intermediate and shared ownership. If you are coming up to that, maybe that is your threshold.’ But not everyone is happy with the proposals.

John Bryant, policy leader at the National Housing Federation, said: ‘The fact remains that there is in principle a sanction there that people will either have their house taken away or the rent radically increased or some very painful sanction as a reward for improving their circumstances.

‘I think the risk of a disincentive [to improve circumstances], while it may not be intended, it is hard to see why it wouldn’t be the result of a scheme like this. Why should we do this when the CIH paper points out there are all sorts of ways landlords can improve their [tenants’] life chances without having to resort to this type of sanction?’

Simon Dow, chief executive of Guinness Trust, said it was difficult for landlords to know everything about an individual’s circumstances.

‘Supposing they are earning good money at the moment but they may know something about their health or the long-term prospects of their employer that makes them feel it is not a good deal,’ he said. ‘I’m sure there may be one or two examples of individuals who are very wealthy living in social housing.

‘But ending up with a system that pushes individuals into something they might not want on the off chance you catch one or two seems to me like a very coarse sieve.’

Michael Gelling, chair of the Tenants’ and Residents’ Organisations of England, was also less than impressed. ‘Where does that [paying more if your circumstances improve] happen anywhere else?’ he said.

‘If I’ve bought my house and all of a sudden I get a promotion and I’ve got more money, do I have to pay more? People who are not paying rent are making decisions about people who do pay rent. It is just unfair.’

But the plan also has some support. Pete Richmond, chief executive of Castle Vale Housing Association, said: ‘It does seem sensible that there is a change over time depending on people’s circumstances and requirements.’

With the government’s housing reform green paper on the horizon the debate has a real focus. With real decisions to be made there is still time for landlords and tenants to affect the future of social housing tenancies.

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