The Housing Act 1988 was passed by the UK government to regulate residential tenancies in England and Wales. It brought significant changes in the privately rented and social housing sector through the introduction of assured tenancies and assured shorthold tenancies.
The impact of the HA 1988 was on three main areas, which themselves had been regulated earlier under the Rent Act of 1977. These were the loosening of rent regulation, increased security of tenure for tenants and rights of succession for assured tenancies.
Rent regulation
The HA 1988 deregulated rules regarding rent. It allowed landlords to charge any amount of rent for the property, but for tenants to be able to challenge the amount as being too high at certain points in time. These are:
during the first six months of an assured shorthold tenancy (the regulatory minimum under which a tenant has security of tenure)
when the landlord issues notice of an increase in rent, which he or she is allowed to do once a year once the fixed term of the tenancy has ended
If a tenant believes that he or she pays more than the market rate, he or she can contact a Rent Assessment Panel and ask for a review. If the Panel judges the rent to be high, the landlord must reduce it.
The right to challenge the rent is not taken up often by tenants. A buoyant rental sector has kept demand for rented property high, and since landlords can end a tenancy easily once the fixed term has ended, tenants may believe that any challenge is likely to prompt a notice to end a tenancy soon after.
In addition, many landlords prefer to end the tenancy each year and have the tenants sign up to a new agreement if they want to stay. This allows the landlord to raise the rent without fear of being challenged for a while longer, and without the need to issue a notice of an increase.
Security of tenure
Security of tenure is the right of the tenant to remain in the property, undisturbed, for a minimum period of time.
Under the Housing Act provides for two types of tenancy.
An assured tenancy provides long term security of tenure, except if the tenant has significant rent arrears. This is the sort of tenancy that most housing associations offer.
Under an assured shorthold tenancy, the tenant only has security of tenure for the fixed term – as set out in the tenancy agreement, but for a minimum of at least 6 months. Only after the fixed term can the arrangement be terminated.
Section 21 of the HA 1988 gives landlords a process to obtain possession of the property, first by issuing a notice, then by following procedures through court. The norm is now a reduced period of security for the tenant.
Succession
The Rent Act set out rules about who could take over (succeed) a tenancy. The HA 1988 changes little – a right to rent can only be inherited by the spouse.
But since most tenancies are assured shorthold ones, and not assured, few tenants actually have these rights. More likely is that both husband and wife are named tenants in the agreement, and on the death of one, the other remains the sole tenant.