In the Beginning…..
Before the First World War around 90% of all housing in Britain was privately rented because people’s work and accommodation were tied. However, when landlords started taking advantage of the increased wages of munitions workers at the beginning of the war by arbitrarily raising rents, the first (temporary) Rent Act was passed in 1915 to try to prevent this.
Most tenancies created before 1989 were regulated by the first of two statutory codes, the first being that set up by the Rent Act 1977. This Act consolidated all the Rent Acts that had been passed since the first (temporary) Rent Act passed in 1915. Such tenancies are known as protected tenancies and they changed the underlying common law in three main ways:
- By introducing rent regulation, which meant the landlord had to not only charge a fair rent but couldn’t increase it unless it was in accordance with complex statutory legislation;
- By introducing long-term security of tenure;
- By introducing ‘rules of succession’ which denoted what happened to the tenancy after the death of the tenant.
Whilst this greatly benefited tenants there were some unwelcome side effects.
Freehold land costs increased as prospective landlords purchased instead of rented as they had no desire to risk never see their properties returned to them in their own lifetimes. By the late eighties, only 7% of all housing stock was privately rented. Added to all this was a major recession and it was easy to see why the private rental sector needed its fortunes reversing, not least to step into the gap left by councils who were not only selling their stock under Right to Buy but were not replacing them by building new stock.
So what did Government do? They created the Assured Tenancy but landlords still weren’t happy though because a) the Assured Tenancy did not go far enough in reviving the rental market which is what it was created for and b) they didn’t get an automatic right to get their property back at the end of the tenancy agreement. So Government created the Assured Shorthold Tenancy and what defines both tenancies can be read here.