Could this be the end of an era for lifetime council tenancies?

The Proposal: A five-year limit on new secure council tenancies

On 8 December 2015, the Government submitted an amendment to the Housing and Planning Bill which will bring to an end the principle of council tenancies for life. This follows a commitment in the July Budget to review lifetime tenancies, which the Government now proposes to replace with new secure tenancies of up to five years.

The end to lifetime tenancies was indicated by David Cameron in 2010 when he called for fixed terms of up to five years for all new council tenancies to help increase social mobility.

Under the current secure tenancy rights, originally introduced by Thatcher, tenants can remain in their property for life on the basis that they do not break the conditions of the tenancy. They also have a right to purchase the property through the Right to Buy Scheme and can even switch properties with another council tenant and pass on the right to live in the property to someone else.

The current rules apply to properties let before 2012 and most properties let after this date when, in the Localism Act 2011, the Coalition government gave councils the discretion to determine the length of tenancies according to local needs. These are known as flexible tenancies and are for a fixed-term of not less than two years. It is understood that the Government has decided to legislate on this matter because they felt councils were not making effective use of their power to offer flexible tenancies.

The proposed amendment, which was not included in the Government’s first draft of the Bill, will force councils to offer new tenants temporary contracts of between two and five years. This will not apply retrospectively, meaning that current lifetime tenants will not lose their rights. However, a next-of-kin inheriting the property will be required to apply for a new tenancy which could be as short as two years. Tenants will still be able to exercise their right to buy and must have resided in social housing for three years to be eligible.

Six to nine months before the fixed-term ends, councils will be required to review the tenant’s circumstances and determine whether to grant a new tenancy, require the tenant to move into a social rented property, or terminate the tenancy. If the council terminates the tenancy, they must support the tenant with regard to accessing other housing options or entering home ownership.

Political views on the proposed change

The Conservatives argue that their proposal will improve local authorities’ abilities to provide council homes based on need and income. They argue that it will improve social mobility and help those who no longer need a council home to climb the property ladder.

David Cameron has admitted that “not everyone will support this” arguing that “we should be asking when you are given a council home…maybe in five or ten years you will be doing a different job, be better paid and won’t need that home, you will be able to go into the private sector.”

The proposal has been attacked by Labour MPs who argue that the proposals are wide-ranging and controversial. John Healey, Labour’s Shadow Cabinet Minister for Housing, believes that the move will break up communities and deny families a stable home.

Legal impact: views of lawyers in the field

Lawyers argue that this is the most major reform of housing law since local authority tenants were given security of tenure in the Housing Act 1980.

The impact of the proposal could lead to a greater number of tenants taking advantage of the Government’s Right to Buy Scheme by purchasing their council property once they have resided in social housing for the requisite three years.

The change may also result in more disputes and possession claims being issued by councils in the event that tenants refuse to leave their property at the end of the fixed-term.

What happens next?

The Housing and Planning Bill is due to enter the Report Stage in the House of Commons on 5 January 2016 where Members of Parliament will debate and vote on the Bill. The Bill will then enter its Third Reading which is the final chance for the Commons to debate the Bill before it goes through a similar process in the House of Lords.

Could this be the end of an era for lifetime council tenancies introduced more than thirty years ago?

Sian Evans is a partner and Grace Quigley is a trainee at Weightmans