Qualitative research to explore the implications for private rented sector tenants and landlords of longer term and moresecure tenancy

4 VIEWS ON STRENGTH AND WEAKNESS OF THE CURRENT TENANCY REGIME

4.1 This chapter covers the range of views expressed on the strengths and weaknesses of the current tenancy regime for the PRS. Given its predominant use, the focus is very much on the SAT regime, although where participants made comparison with the Assured regime this is also set out.

Strengths of the current regime

4.2 When considering the strengths of the SAT regime, most respondents tended to point initially to its flexibility. This was common to both tenants and landlords and across the range of participants within both groups.

4.3 When this was explored further certain differences did emerge, although for many this flexibility equated to an initial trial period after which either party could, in theory at least, bring the arrangement to an easy and non-confrontational end. Both tenants and landlords used similar language in describing the advantages of having this trial period with comments generally focusing on whether the other party was a 'good' or 'bad' tenant or landlord.

4.4 More specifically, landlords often pointed to finding out whether the tenant paid their rent and otherwise treated the property with respect. Some suggested it also allowed the landlord to test whether the tenant's lifestyle would fit with that of the neighbours and, by extension, whether there could be problems with anti-social behaviour; those raising this issue sometimes went on to note their obligations as private landlords under the Anti-Social Behaviour etc (Scotland) Act 2004^[4].

4.5 Tenants also reported a similar process of using the initial tenancy period to test out their landlord. From the tenants' perspective the focus was very much on whether repairs were carried out and whether the landlord otherwise behaved well, for example by not making unannounced visits to the property.

4.6 A number of tenants also saw the initial tenancy period as giving them a valuable opportunity to test out other aspects of their new home. Some of these were about the property itself, such as whether it was reasonably easy and affordable to heat. Others were about whether the property fitted well with their preferred lifestyle, for example was it well positioned for travel to work or schools and did they like the neighbourhood. These considerations were particularly important to tenants who were new to an area having made a work-related move.

4.7 Other advantages which tenants saw as coming from a short, initial fixed period tenancy included that both tenant and landlord have a clear understanding of what is expected to happen in the short term - essentially that the tenant has made a commitment to stay for 6 months and the landlord has made a commitment to make the accommodation available for that period. This was particularly appealing to tenants who were either uncertain of their future plans or were not at a time in their lives when they wished to make longer-term plans.

4.8 Some tenants also saw a clear correlation between a shorter-term tenancy and being able to access a property quickly. For example, there was a suggestion that if a tenancy was for a shorter period the landlord or agent might be more 'relaxed' about carrying out previous tenancy checks. Those raising this issue were not concerned that they would not pass such checks, but were concerned that the time taken to go through these processes could be lengthy. Again, those who had needed or wanted to move quickly raised this issue.

4.9 Tenants who were contemplating a move into the owner-occupied sector were also likely to favour a regime that offered the capacity to move on quickly but without penalty and generally felt that the SAT regime delivers according to these criteria.

4.10 The overall impression from both landlords and many tenants was that the initial fixed period is an easy-to-understand and well-understood approach, albeit that there is some confusion about the precise arrangements at the end of that period and thereafter (as discussed in Chapter 3). Despite being a business arrangement there was also a sense that many participants welcomed the potential to simply bring the arrangement to a civilised end without explanation or the need to find fault. As one landlord who ended a tenancy at the end of an initial 6 month period expressed it:

It was a shame, because she was a lovely girl... but it was just too small a house for the children and next door were complaining… I'd have hated to have to say that to her though cos she really was trying her best... and I found a mate of mine with a place round the corner...
(Experienced, full-time landlord renting in urban area)

4.11 Equally, a small number of landlords suggested that the current regime inclines them - or more precisely does not entirely rule out their capacity to take a calculated risk on certain tenants, or as one landlord commented:

Sometimes you might want to give someone the benefit of the doubt... a younger person leaving home for example... it's good to know there are options if it's not working out.
(Experienced, part-time landlord with small town/rural portfolio)

4.12 However, whilst the 'civilised' end to a tenancy was sometimes cited as a positive outcome, most landlord participants were also absolutely clear that the capacity to bring a 'problem tenancy' to an end was critical, be it automatically at the end of a fixed tenancy period or simply by giving sufficient notice within a rolling tenancy period. Many, therefore, supported the theoretical basis on which a SAT can be brought to an end. However, as will be discussed further below, they often had very considerable concerns about how this works out in practice.

4.13 Finally, some landlords noted other business-planning advantages that the current regime offers. For example, a small number of newer landlords, including some who had started out as reluctant landlords, suggested that the initial 6 month period had given them the confidence to explore whether being a private landlord was the right option for them. A small number of larger, more established landlords noted that the SAT regime gives them reasonable flexibility to manage their assets or is advantageous in terms of the valuation of assets. The fact that the financial sector assesses the asset value of properties rented using SATs favourably was explained as critical to accessing affordable borrowing and by extension maintaining business viability.

Weaknesses of the current regime

4.14 While most participants identified strengths in the current SAT regime, most were also able to identify weaknesses. As with the positive aspects, some of these were about the fundamental principles which underpin the regime, whilst others were about how the regime translates (or not) into practice on the ground.

4.15 As noted above (para 4.12), many landlords' concerns were around the practicalities of regaining possession of their property should the need arise. Although few of the landlord participants had direct experience of seeking repossession of a property through the formal channels, many had heard or read about the experiences of others. There was a strong consensus that the current processes, particularly those involving the Sheriff Court, are time-consuming, costly and potentially ineffectual. A number pointed in particular to the significant financial losses that can be incurred by the landlord - especially in relation to rent arrears - and the lack of any workable mechanism to recover any of those losses.

4.16 These problems, along with some issues around the complexities of the tenancy regime, were the principal concerns expressed by landlord participants, and the main areas in which they would welcome change. Otherwise, landlords tended to the view that the current system works reasonably well and there is no need for significant change.

4.17 Tenants were more likely to raise significant concerns about the current tenancy regime although, as with the landlords, the most frequently raised issue was about how the regime translates into practice on the ground, rather than the regime itself.

4.18 For tenants, the issues raised most frequently and forcefully concerned the condition of the property in which they were living and, more specifically, the difficulties in getting landlords to carry out improvements or repairs. Those experiencing such difficulties tended to be living in the bottom end of the sector and/or in rural areas and some of the problems being reported - particularly in relation to water ingress and dampness - were severe. Those in these situations were clear that their priority and, by extension, the issue they would most like the Review Group to address, was property condition:

I hear what you're saying that the Government is looking at this and that's nice… but I'd rather they made [landlord's name] fix my house... my bairns don't care what some paper says… they just want somewhere nice to stay… so they can bring their pals back and their stuff doesn't end up stinking.
(Tenant with children in receipt of LHA, renting in urban area)

4.19 Those affected by these kinds of issues had little faith that changes to the tenancy regime would help improve their position (as discussed further in Chapter 5). Rather, they were looking for a quick and easy route by which landlords could be required to carry out repairs and, in particular, for an independent body or bodies to take responsibility for carrying out condition checks and ensuring that landlords carry out any necessary repairs.

4.20 Although property condition, along with rent levels and affordability, were the most frequently raised issues, some tenants did have concerns that related directly to the current tenancy regime. These concerns were generally about the lack of longer-term security afforded by the SAT regime and were very often raised by those with previous experiences of living within the social rented sector.

4.21 Concerns about lack of security were particularly strong amongst older tenants, those with specific housing requirements (such as for a wheelchair-accessible property) and those with school-age children. However, not all tenants with school-age children raised these concerns and there was a clear correlation between the feelings of powerlessness and lack of choice (as discussed at paragraphs 2.24-2.30) and security-related concerns. Those who were less concerned about their capacity to access another suitable property were also less concerned about the possibility of being asked to leave their current home while those who had already struggled to find the right home, or indeed any home at all, were often very concerned about the prospect of losing it.