Fixed Term Tenancies: Social housing at a cross-roads

estate concept, keychain with house symbol, red clock, time buying

A new I-SPHERE report reveals how housing associations and local authorities in England are using Fixed Term Tenancies. Beth Watts shares the main findings and reflects on their implications for the social housing sector.

Since 2012, social landlords in England have been permitted to offer fixed term tenancies (FTTs) rather than ‘lifetime’ tenancies to new tenants. This move, facilitated by the Coalition Government’s Localism Act (2011), can be understood as a radical acceleration of more gradual attempts to weaken security of tenure via the introduction of ‘probationary’ and later ‘demoted’ in the 1990s and 2000s.

‘Flexibilities’ to use FTTs were introduced in an attempt to ensure that “this scarce public resource can be focused on those who need it most, for as long as they need it”, with the Government advising that income, employment status, under-occupancy and behaviour could all be taken into account in deciding whether to renew tenancies at the end of their fixed term.

Dr. Beth Watts, Senior Research Fellow

In previous research we have explored sector experts’ views on FTTs and followed a cohort of social tenants on less secure tenancies over a 2-year period to consider the impact of these policy changes at the individual level (see here and here). Our  new report details the findings of two bespoke online surveys of local authorities (LAs) and housing associations (HAs) in England, conducted in partnership with the Housing Quality Network.

The surveys aimed to illuminate how and why social landlords are using FTTs, and their impacts on both landlords and tenants. Over 80 HAs and 50 LAs participated in the research. With LAs expected in future to be compelled to use FTTs for new tenants under provisions introduced – but not yet in force – under the Housing and Planning Act, this evidence offers important insights into the benefits and challenges associated with FTT regimes.

A majority of the responding HAs, and almost half of the LAs, are using FTTs for all or some new tenants, with authorities in the South and HAs operating across multiple regions most likely to do so. Reflecting the Government’s stated policy intentions, the main motivations for doing so were reported as promoting efficient use of stock, tackling under-occupation and better targeting stock at those ‘in need’.

“Due to the high demand on our housing stock we felt it was important to reduce the creation of tenancies for life.” (HA, East of England)

“Most of the stock FTTs apply to is in [local area] which has a substantial homelessness problem and lack of affordable rented properties. FTTs are being used to ensure we check that tenants still require the size/type of property to help those in housing need.” (HA, North West)

Also important to those landlords who had elected to use FTTs was Government expectation that landlords would begin to deploy this form of tenancy, and in particular landlords’ initial understanding that FTTs had to be used for new Affordable Rent tenancies (it was later clarifed that this was not the case). For Conservative-led LAs, the views of local elected members who were in favour of FTTs on ideological grounds was also influential.

Equally, social landlords who had decided not to use FTTs often described this as a value-based decision taken by elected members or boards. In this case, it reflected an ongoing ideological commitment to providing ‘homes for life’, and to the role of open-ended tenancies in supporting tenant wellbeing and stable communities:

“Lifetime tenancies provide stability and certainty for residents; they produce mixed communities and a sense of belonging which encourages resident involvement, the cornerstone of meaningful service improvement… Residents who are invested in their tenancies are more likely to care for their properties and gardens; creating homes rather than just ‘places to live’…. For those vulnerable residents, the sense of stability and belonging, is all the more important and can immeasurably improve quality of life.” (London borough)

“The Board felt that it [adopting FTTs] would not be appropriate for a community organisation that is trying to develop a greater sense of community… one way to [do] that is to offer certainty in housing.” (HA, London)

While some FTT-using social landlords now deploy them as their ‘standard offer’ to all new tenants, others are targeting FTTs at particular property-types (for instance those in high demand areas, new builds, or larger properties) or kinds of tenants. Some landlords were using FTTs to mitigate the risks of welfare reform, targeting shorter tenancies at those for whom they had affordability concerns, raising equity and security concerns for tenants already disadvantaged by benefit cuts.

A significant minority (around a quarter) of participating landlords had not yet adopted formal review policies. This likely reflects that the first tranche of FTTs are only now coming up for review, but means that a large number of tenants are facing these reviews with little or no idea of the criteria that will be used to assess whether they can stay in their home or not.

One third of participating HAs and a single LA had made at least some non-renewal decisions, but these had been rare or very rare. Stated reasons for non-renewal where it had occurred included tenancy breaches (rent arrears or ASB); under-occupation or overcrowding; high income; and that property adaptations were no longer required. In addition, several HAs identified “non-compliance with request[s] for information” (HA, London) e.g. about household composition and income, as the reason for non-renewal decisions. What is interesting here is the much stronger emphasis on increased landlord leverage in enforcing tenancy conditions – particularly behavioural conditions – in the actual practice of FTTs than in the ostensible motivations for introducing them. This shift in the power balance between landlord and tenant was, however, at the forefront of the minds of many of the tenants subject to FTTs that we interviewed in the earlier study.

The majority of respondents felt it was too early to tell whether FTTs were a ‘successful’ policy, but of the minority prepared to venture a preliminary verdict, opinions were split, and HAs were considerably more positive than LAs. Positive impacts were said to include a sense that FTTs had strengthened the incentive for tenants to ‘play by the rules’, paying arrears back faster, for instance. A cluster of respondents talked more generally about FTTs facilitating a ‘better conversation’ with tenants, ‘re-educating’ them about the role and nature of social housing and communicating it’s value. Once again, a fairly robust ‘behavioural’ agenda can be discerned here. In contrast, only a handful of landlords had observed early signs of FTTs facilitating better use of stock, despite this being the main stated policy aim. Alongside additional administrative burdens, those who were critical of FTTs tended to highlight concerns about potential legal challenges and scepticism about their behavioural impacts on tenants

Beneath these practical concerns, however, the more fundamental debate about FTTs seems to signal ‘competing visions’ of who and what social housing is for. Responses revealed significant polarization between those who see the appropriate role of social housing as addressing acute housing needs on a relatively short-term ’emergency’ basis, and those who believe it should meet the longer-term needs of households for stability, belonging and connectedness to homes and communities:

“I think it is the right thing to do, if you need a social rented tenancy then you will have one and keep it for that period of need.” (HA, South East)

“fixed term tenancies undermine social housing. The reason why people want social housing is because of security of tenure and reasonable rents… There are tenancies and there are HOMES – and I believe that the latter is what people need and deserve.” (HA, multi-region)

Where one stands on FTTs seems, then, to rely at least as much on one’s underlying ‘values’ with regard to the nature and purpose of social housing, as on one’s understanding of the specific impacts of this particular policy instrument.

This research was launched at the HQN annual conference in London on 17th July 2018. It was conducted in collaboration with HQN and linked to a broader Economic and Social Research Council project Welfare Conditionality: Sanctions, support and behaviour change. The full report written by Beth Watts and Suzanne Fitzpatrick can be read here.