Government Proposes to Increase Minimum Length of Tenancies to Three Years

Posted on July 02, 2018

Government proposals could mean that Landlords cannot rent their properties for less than a fixed period of three years. There is currently no minimum term required for an Assured Shorthold Tenancy in England and Wales, and so the current proposals could result in a dramatic change in the law. With the proposals being driven by concerns for the security of tenants and protecting them against the upheaval of having to move homes at short notice, it could be that Landlords’ lose a great deal of freedom in dealing with their own properties. This is arguably at the centre of an ongoing ‘pro-tenant’ v ‘pro-landlord’ debate, at a time where more and more people are renting properties. Victoria Scott from our Dispute Resolution department explores this issue in more detail:

Both the Deregulation Act 2015, and more recently the Energy Efficiency (Private Rented Property) (England and Wales) Regulations 2015 (“the Regulations”) have provided Tenant(s) of rented properties with greater support and protection. It now seems that further ‘pro-tenant’ changes to the Law may be made in an attempt to provide tenant(s) with greater security when renting properties.

Section 21 of the Housing Act 1988 provides Landlords with a mechanism to bring an Assured Shorthold Tenancy (AST) to an end without the requirement for any ‘fault’ on the part of Tenant(s). A Landlord can serve a ‘Section 21’ notice upon Tenant(s), requiring them to vacate the let property by a certain date. Whilst Landlords do not have to give a reason for evicting tenants in this way, this type of notice requires a minimum of two months’ notice to be given. Where vacant possession is not provided to the Landlord following expiry of a Section 21 notice, a Landlord must issue possession proceedings in Order to obtain an Order for Possession.

It is common for AST’s to be granted for an initial period of 6 or 12 months. However, there is currently no minimum fixed term for an AST. That being said, it is not possible for an Order for Possession to be made (pursuant to Section 21 of the Housing Act 1988) earlier than six months from commencement of the term of the original tenancy. This effectively creates a period of protection of six months for tenants who are living in rented property, and who are not in breach of their AST (separate options are available to Landlords where tenant(s) are in breach of the AST, i.e. where there are rent arrears in excess of two months’ rent). In other words, where tenant(s) act in accordance with the terms of an AST, they can rest assured that they will be allowed to stay in their rented property for at least 6 months.

However, recent government proposals look to give tenant(s) of rented properties greater security, with suggestions that a minimum fixed term of three years should be imposed for tenancies. The driving force behind these proposals is affording greater security to tenants, by protecting them against the upheaval of having to move at short notice. Particular concern has been shown to those tenants renting properties for their families, with young children.

The proposals suggest that tenants would be able to end the tenancy earlier if they wanted to, whilst Landlords would not be able to. Many Landlords consider these proposals to be unfair and have shown their dissatisfaction by reason that the changes will make dealing with ‘problem tenants’ more difficult, and that it will ultimately takes away a Landlord’s freedom to deal with their own properties.

Even if the proposals do lead to changes in the Law, Landlords will still be afforded with protection under Section 8 of the Housing Act 1988. However, the protection afforded by Section 8 of the 1988 Act is more limited, and it is can arguably be more difficult to secure an Order for Possession in this way.

These proposals are certainly at the heart of a ‘pro-tenant’ v ‘pro-landlord’ debate, and it will be interesting to see how the consultation process develops and progresses over the next couple of months.