Call for indeterminate tenancies and CPI linked rents

Call for indeterminate tenancies and CPI linked rents

8:44 AM, 27th December 2018, About 5 years ago 19

Text Size

The Resolution Foundation, “a non-partisan and award-winning think-tank that works to improve the living standards of those in Britain on low to middle incomes,” has issued a press release caaling for:

“Government to improve security and stability for young tenants by making indeterminate tenancies the sole form of private rental contract and introducing light-touch rent stabilisation that limits rent rises to CPI inflation for set three-year periods.”

Click here for the full press release:

First rise in home ownership for young families for 30 years – but Generation Rent is here to stay

Home ownership rates for families aged 25-34 are rising for the first time in 30 years, but high barriers to entry facing first-time buyers remain acute, according to new analysis published today (Saturday) by the Resolution Foundation.

The Foundation says that eased credit conditions, as we move further away from the financial crisis, and a slowdown in house price growth in recent years have improved the situation for young first-time buyers. As a result, home ownership rates among 25-34 year olds have risen by 3 per cent since they hit the rock bottom level of 25 per cent in 2016.

The analysis finds that this increase is the equivalent of an extra 190,000 young families owning a home this Christmas. However, young families’ home ownership rates are still barely half as high as their late 1980s peak, when half owned their own home. If ownership rates hadn’t fallen sharply from this peak, 1.4 million more young families would be home owners today.

The Foundation adds that, despite this recent uptick, renting will continue to be the norm for the majority of young people, particularly in the UK’s major cities. The long term drivers of lower home ownership are here to stay with low interest rates and a shortage of homes driving higher house prices and deposit requirements. It would currently take a first time buyer in their late 20s around 18 years to save for a deposit if they relied solely on savings from their own disposable income, up from three years as recently as in the mid-90s.

New local area analysis shows that fewer than one in five young families in London, Manchester, Liverpool, Brighton and Birmingham currently own. For these families, owning their own home is likely to come far later in life, if at all.

In contrast, nearly half of young families in areas like South Lanarkshire, South Hampshire and Central Bedfordshire already own – highlighting that Britain’s housing divide is not just between London and everywhere else but between our major cities and rural areas.

The analysis shows that falling home ownership rates, and reduced access to social housing, have driven rapid growth in the number of young families who rent privately. Nationally, the share of young families in the private rental sector increased from just 9 per cent in the late-1980s to 34 per cent today.

For this group of renters, shared residencies are quickly becoming a core feature of urban British living: twelve per cent of all young families are now sharing with others in the private rental sector, an increase from just 3 per cent in the late 1980s. In Bristol and Brighton, one in three young private renters are now living in shared accommodation.

The Foundation says that rising home ownership rates for young people will be welcome news, but a better deal for renters is needed as the high financial barriers to getting on the property ladder will continue to force many into long-term renting.

It calls for the government to improve security and stability for young tenants by making indeterminate tenancies the sole form of private rental contract and introducing light-touch rent stabilisation that limits rent rises to CPI inflation for set three-year periods.

Daniel Tomlinson, Research and Policy Analyst at the Resolution Foundation, said:

“After decades of falling home ownership, recent conditions in the housing market as we move away from the immediate aftermath of the financial crisis are finally helping more young families to buy a home of their own.

“But the long term drivers of lower ownership rates, including low interest rates, and high house prices and deposit requirements, are here to stay. Home ownership rates for young families are barely half as high as they were back in the late 1980s, while fewer than one in five own in many of Britain’s major cities.

“So as well as welcoming the tick up in youth home ownership politicians should act to increase the number of homes available to buy, use the tax system to favour first time buyers over second home owners, and ensure that the private rental sector is fit for purpose – providing the security that many young families need.”


Young families” refer to a single adult or couple headed up by someone aged 25-34, along with any dependent children.

Share This Article


Dr Rosalind Beck

10:01 AM, 27th December 2018, About 5 years ago

More nightmare interference from people who think that by not seeing the housing providers' point of view at all and only looking at the recipient of housing's alleged needs, that policy will be improved in the private rented sector.

Dr Rosalind Beck

11:26 AM, 27th December 2018, About 5 years ago

Can anyone find the full report? I want to know what they mean by indeterminate tenancies -whether, according to their proposal, owners of properties can ever get control of their asset back - eg if they want or need to sell?

Dr Rosalind Beck

12:35 PM, 27th December 2018, About 5 years ago

Reply to the comment left by Rob Crawford at 27/12/2018 - 11:55
Thanks, Rob. That is the one, yes. They say that a landlord would be able to regain the property if they wished to sell or re-occupy the property. My own belief is that if this policy came in, it wouldn't be long before it was pushed to even further extremes - eg that the landlord would have to sell with a sitting tenant, which would limit the number of purchasers they could find and lower the price and value of the asset.
It is a ludicrous one-size fits all idea - it would be very difficult for cash flow. The worst aspect in many cases wouldn't be that people wanted to stay for too long, but rather that the tenant could up and leave whenever they wanted, regardless of how long they had initially said they wanted to stay.
I haven't read all of the report yet, but I would imagine it would be really bad for landlords specialising in student lets - as students could decide to rent from eg end of September and leave in May, but the landlord wouldn't be able to let the property then for a short-term let inbetween student lets, as short-term lets wouldn't exist - ruinous for landlords' finances and a complete waste of housing, as properties would be left empty when they could be being used.
I bet they also haven't looked into the number of tenants who want very short-term lets - Erasmus students, people who want to try out living somewhere etc. Although I suppose they all just get these 'indeterminate' tenancies - and can up and leave when they want.
I think also that it would be very bad for the families it is supposed to help. Many landlords would then favour young singletons who are likely to not want to stay forever, but eg just a year or two for their work. Families with young children wouldn't want to be touched by many landlords because of long-term implications - especially if, as I suspect - the landlords' rights to regain their asset were abolished further down the line.
I think this stupid idea could decimate the sector and massively increase homelessness as many accidental landlords would choose to leave their second property empty. But as these bodies don't consult landlords or see anything from our point of view, but instead stick to a set ideology, they cannot see any of this.
We can only hope that Corbyn never gets in and that the Tories come to their senses and stop adopting these damaging left-wing policies, sooner rather than later.


15:43 PM, 27th December 2018, About 5 years ago

Reply to the comment left by Dr Rosalind Beck at 27/12/2018 - 12:35
Your comments are reflected what is happening in Scotland. As we up here are living the policy an incidental outcome that has arisen is, as tenants need only give 28 days notice to leave and landlords have no " no fault" clause to rely on, incoming students cannot secure a property in the future. Landlords cannot assure a property or forward date a lease.

Old Mrs Landlord

16:10 PM, 27th December 2018, About 5 years ago

I haven't read the full report either but, as others have said, it looks at the situation almost exclusively from the viewpoint of the renters and asserts that landlords' legitimate concerns regarding indeterminate tenancies and rent controls "pale in comparison with the needs of renters". This is despite the fact that the authors acknowledge that over 90% of tenancies are ended by the tenant and that, except in London, rents have not even kept pace with inflation. As I see it, the primary need of a renter is a landlord willing to offer a tenancy and this will not be achieved by open-ended tenancies or rents too low to cover costs and a modest profit Neither will it be achieved by the report's other stated aim of "reducing over-housing", which they define as people living in homes larger than they need or owning more than one property - not merely owners of holiday homes but also landlords. The report's authors claim there is unfairness when housing is viewed "through a generational lens". The obvious fact that it is the accumulated earnings and savings of a lifetime that enables older people to own larger houses and landlords to have properties available to let eludes them and they see only generational unfairness.

Luke P

17:01 PM, 27th December 2018, About 5 years ago

Reply to the comment left by AA at 27/12/2018 - 15:43
Wouldn’t it be cheaper to rent a house (pretending to be long-term) instead of getting a hotel room for, say, a week -especially Edinburgh during the Festival- and give your month’s notice the day after collecting the keys? Could even pop back for a holiday or city break later in the notice period if you liked… The hassle would depend on the savings to be made, but unbelievable that this scenario *could* arise!


18:00 PM, 27th December 2018, About 5 years ago

My focus is now flipping, rather than rental, I have one good tenant left and once they are gone the house will be sold. So rather than finding houses to tent, I now look for property to improve and put back on the market.

Dr Rosalind Beck

18:12 PM, 27th December 2018, About 5 years ago

Reply to the comment left by AA at 27/12/2018 - 15:43
Very interesting. We could really do with Scottish landlords' perspectives here. If landlords from Scotland can tell us how their experience as guinea pigs (as far as the rest of the UK is concerned) is going, that would be useful. My understanding is that there is another issue, which is that there are tribunals which are taking ages and as we know justice delayed is justice denied - especially for landlords as the tenants get to 'steal' more money from us, the longer they are allowed to stay when they are not paying the rent. The fact that student lets cannot be agreed in advance must be playing havoc with landlords' businesses and also the 'stability and security' that we are always criticised for not providing.
I assume that the Scottish Association of Landlords must have produced some analyses of these issues. Does anyone have any links?

Arnie Newington

18:48 PM, 27th December 2018, About 5 years ago

Reply to the comment left by Dr Rosalind Beck at 27/12/2018 - 18:12It has been pretty much business as usual in Edinburgh. The main change is about 6% of tenancies are ending within six weeks. This blow is lessened as the demand is such that new tenants are able to move in so void periods are short. The first tier tribunal is good but clunky and the Scottish Association of Landlords have been warning that they have been quite pernickity with paperwork and that it is taking longer than it should. Decisions are available to view on the website and most are as you would expect e.g. landlord goes to get property back due to arrears tenant doesn’t turn up landlord awarded possession in due course. The main downside for tenants is that rents in Edinburgh are very high probably double what they were before the government intervened.

1 2

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership


Don't have an account? Sign Up

Landlord Tax Planning Book Now