L&Q is to end the use of Fixed Term Tenancies (FTTs) in favour of open-ended assured tenancies as its preferred tenure type.
Around 8,500 existing fixed term tenants will move onto tenancies with measures planned to support aspiring homeowners and customers who need to move due to a change in their circumstances.
The decision follows extensive research and consultation with residents and a detailed analysis of data covering the full life-cycle of FTTs.
It also responds to government’s offer of greater flexibility outlined in the recent Green Paper.
Research highlighted the fact that many residents suffer anxiety about the renewal process. It also found that FTTs were not achieving their desired policy outcomes, largely because they introduce an arbitrary renewal date that does not reflect individual circumstances.
L&Q chief executive David Montague said: “We found FTTs to be a crude tool that have not fixed the problems they were created to address. What’s more, the renewal process causes unnecessary worry for residents.”
“We share the government’s determination to tackle social stigma, ending fixed term tenancies, introducing a new home standard, linking rents to local incomes and a £250m long-term investment in communities to build skills and opportunities are all designed to ensure that everyone has a safe, secure, quality home they can afford.”
Research highlights include:
- During the six-year period covered by the analysis, in very few cases did the renewal date of the tenancy coincide with a change in resident circumstances
- Other than for serious rent arrears, L&Q has effectively renewed the overwhelming majority of its 8,500 FTTs without ending a single FTT due to the under-occupation of a home
- FTTs act as a barrier to mobility as people don’t want to lose security of tenure
- The research confirmed that the biggest barrier to meeting housing need, including downsizing, is the lack of available suitable homes
Because of these findings, L&Q is now working closely with residents to develop a package of support measures and incentives that will be more effective in encouraging resident mobility when housing needs change and which we plan to make available.
The decision to end fixed term tenancies comes shortly after L&Q announced a new home standard.
Fayann Simpson, Board Member and Chair of Resident Services Group said: “I’m delighted that L&Q has made these changes following extensive consultation with residents – it will help thousands of residents to feel more secure about their home and their future.”
Since 2011, L&Q has issued around 8,500 FTTs to social housing tenants and currently manages around 41,000 assured tenancies, with the average annual income of a social housing tenant being £14k and that for shared-ownership being £52,000.