‘Fixed term’ tenancies: unintended consequences

‘Fixed term’ tenancies: unintended consequences

Last Wednesday I was on BBC Radio with Brian Mattock, Deputy Leader of Swindon Council, discussing the Councils proposed “Tenancy Strategy”. Brian’s role was to present the proposals in such a way that they appeared eminently reasonable and were nothing for anybody to fear. You might say he is the Mr Nice of the Nasty Party.

However, when the presenter asked “how do you determine who ‘deserves’ a tenancy” and who doesn’t, Brian tied to wriggle out of the issue. That was the government’s view, he said. However, the document which he voted on at the Cabinet meeting restated the policy of ensuring that Council housing goes to those ‘who deserve it’. Of course, this is nothing other than the coalition government’s modern version of the well known Victorian  concept of the ‘deserving’ and the ‘undeserving’ poor. At least with the current criteria there is an attempt to base the granting of tenancies on housing need. Deciding on whether somebody ‘deserves’ a tenancy is entirely subjective. It’s as if a tenancy is reward for good behaviour. That’s how one cabinet member described it. The giver of such ‘charity’ of course, has power over the recipient. 

Brian’s justification for the introduction of ‘fixed term’ tenancies seemed to be that this was ‘normal’ in the private rented market. It’s not so bad after all, since these are longer tenancies than in the private sector.

He attempted to downplay the proposed income ‘threshold’, above which you could not have or keep a Council tenancy. Good Heavens no, the Council was not about to kick anybody out of their home because they got an extra £5 a week at work. No? Then what is the point of introducing an earnings ‘threshold’ if you are not going to apply it? A threshold is based on the idea that somebody earning ‘too much’ cannot have or keep a Council tenancy.

Brian fell back on a somewhat cynical appeal to self-interest and indifference, by telling existing tenants that they had nothing to fear because they were unaffected. As I said in response, all the tenant organisations in Swindon have not taken the ‘I’m all right Jack’ position and stated clearly that we are opposed to new tenants being treated any worse than we are. However, Brian didn’t offer any justification as to why existing and new tenants should be treated differently.

Although the original proposal for a household earnings threshold in Swindon (joint tenants or the two highest earners) was set at £38,000, the figure was deleted from the document presented to the Cabinet, and it was said that the amount would be determined by the Council’s Strategic Housing Market Assessment. Obviously none of the Cabinet members had bothered to check that because when you read it there are no definite estimates of the level of income at which a particular family, which requires x number of bedrooms, will be able to afford to buy a house. It only offers averages for different types of property with no reference to the number of bedrooms. In any case, just because the Council says that somebody can ‘afford’ to buy a home it doesn’t mean that they will be able to get a mortgage, especially when people face the hurdle of large deposits which were not required prior to the housing crash.

Despite Brian Mattock’s emollient performance the fact is that ‘fixed term’ tenancies would give the Council more power over tenants; the power to have a detrimental impact on the lives and finances of tenants whose income may cross the threshold. They will have the right to evict people who have done nothing wrong. In addition even in the case of somebody who has a renewed tenancy, if there is a change in their household composition, the Council will be able to force them to ‘downsize’. However, given the shortage of smaller homes, if they have nothing to move them into, the tenant will be caught by the ‘bedroom tax’.

The administration has not thought through the impact of their proposal. There will be unintended consequences. If a tenant/s face the threat of being thrown out of their home by way of the Council refusing to renew it, they have three choices. They can

a) leave and move into private rented accommodation, with a rent increase which could be up to double their Council rent;

b) try to buy a house on the open market, if they can get a mortgage, and if they can raise the necessary deposit;

c) take advantage of the government’s new enhanced ‘right to buy’ terms, buying their Council home.

Almost certainly the cheapest of these options will be ‘right to buy’, so the consequences of ‘fixed term’ tenancies, will be to increase the number of ‘right to buy’ sales. The government is cutting the qualifying period from 5 years to three years, so tenants on 5 year tenancies will now qualify. So instead of freeing up homes for people on the waiting list, the policy will lead to the loss of more Council homes. Moreover, we know that the amount of money the Council will receive is insufficient for the ‘one for one’ replacement which the government said would happen. According to the Council’s own figures for every 30 homes that are sold they could only afford to build 7 to 9.

That’s yet another reason why ‘fixed term’ tenancies and turning Council housing into  means-tested housing should be rejected.

Martin Wicks

August 5th 2013

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