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Strategic Tenancy policy

Bury Council Strategic Tenancy Policy 2022 to 2025, local approach and guidance for registered providers.

1. Introduction

1.1. The Localism Act 2011 placed a duty on all local authorities in England to produce and publish a tenancy policy for their area, setting out their housing management functions and the matters that registered providers must have regard to when formulating their own tenancy polices, to ensure a consistent approach. This includes:

  • details of the types of tenancies they offer, rent status and the circumstances in which tenancies of a particular kind including flexible and fixed term tenancies will be granted
  • the length of the tenancies granted, appeals process and recommended term for flexible and fixed term tenancies
  • the circumstances in which a further tenancy will be granted when an existing tenancy ends
  • approach to conversions of existing stock from social rent to affordable rent at re-let.

1.2. Good quality affordable housing where successful tenancies can be sustained is a key priority for the Council. This Policy sets out the Council's approach to different types of tenancies and the way in which they should be administered in Bury, to meet the Council's strategic housing objectives. It provides clear guidance for registered providers to consider when developing their own policies, to ensure that affordable housing in the Borough continues to meet the needs of current and future residents. It does not consider tenancy management issues other than those relating to the termination of fixed term tenancies.

1.3. The aim of the Policy is to:

  • establish clear expectations for registered providers operating in the Borough
  • increase the supply of affordable housing to meet housing needs
  • make best use of the housing stock and build sustainable communities
  • provide a consistent approach to the use of fixed term tenancies, to ensure that they do not have a negative impact on homelessness and vulnerable tenants including care leavers, refugees and asylum seekers
  • set out recommendations regarding the use of lifetime tenancies or long-term fixed tenancies for vulnerable tenants, particularly older people and those with additional support needs
  • prevent homelessness, reduce inequalities and enable affordable housing to be offered to those in greatest need
  • encourage access and allocation to property that is fair and considerate to the personal needs of tenants
  • ensure a balance between affordable rent and social rent tenancies
  • ensure that registered providers offer ongoing support to tenants, particularly vulnerable tenants, to help them sustain their tenancies in order to prevent homelessness and encourage investment in neighbourhoods.

1.4. This policy has taken account of the local and economic circumstances of the Borough together with an assessment of housing need. It has been developed in conjunction with the Council's Allocations Policy, Empty Property Strategy, Homelessness Strategy 2022 to 2025 and the Affordable Housing Policy. It supports the Council's boroughwide Housing Strategy and Bury 2030 vision to reduce disparity and create successful and inclusive neighbourhoods.

2. Local Context

2.1. Bury is facing an increasing shortage of affordable housing with more people on low incomes unable to rent or buy a suitable home they can afford that meets their needs. A Housing Need and Demand Assessment undertaken in 2020 estimates that there is a net shortfall of affordable homes for 448 households across the Borough each year.

2.2. There are approximately 84,000 dwellings in the Borough and around 15 percent of those are affordable homes. Approximately 9 percent are owned by the Council and the majority are let on lifetime tenancies at social rents, circa 40 percent of market rent. The remainder are owned by registered providers who have a good track record of delivering a range of housing tenures including supported housing, social and affordable rented accommodation and low-cost homeownership to Bury's diverse resident profile.

2.3. Just over one fifth of Bury's population is made up of people aged 65 and over and approximately 2,400 people aged 65 and over have dementia. Around 10 percent of Bury residents (19,069 people) have a long standing illness or health condition and around 11,425 people have a physical or mobility impairment. In addition, approximately 0.5 percent of people living in Bury have a learning disability and 17.5 percent have a mental health illness.

2.4. At the end of March 2022, there were approximately 1,506 live applications on the Council's Housing Waiting List. Of those, 199 had an urgent housing need and 147 were owed a full homeless duty.

2.5. The number of households living in temporary accommodation has almost doubled over the last 12 months. At the end of March 2022, there were seventy-seven households living in temporary accommodation in the Borough. The Council manages a portfolio of dispersed homes across the Borough to support this cohort and help meet demand.

2.6. During the period 1st April 2021 to the 31st March 2022 the Council let 403 properties to new tenants in need of affordable housing. Of those, 216 were general needs housing, 70 were adapted properties and 73 were sheltered housing units including extra care.

2.7. The average house price in the Borough is currently £232,577, compared to a national average of £278,000. House prices in the Borough have increased by around 21 percent since they reached their peak in 2019. Ramsbottom is currently the most expensive area to live in with house prices mirroring the national average, and Radcliffe the least expensive where house prices average around £188,500.

2.8. The weekly Local Housing Allowance rates in the Borough range from £66.74 for a one-bedroom property, increasing to £184.11 for a 4-bedroom property. Market rents for private rented properties across the Borough are consistently high compared to market rents in other local authority areas across the region. The average monthly market rent for a one-bedroom property is £561 rising to £3,950 for a four-bedroom property. Undoubtedly, residents in receipt of the Local Housing Allowance would not be able to afford private rented accommodation. Consequently, social rented housing is the only affordable tenure for many people living in the Borough.

3. Guidance on Tenancies for Registered Providers

3.1. Registered providers operating in the Borough offer a range of tenancies including secure, assured, flexible and fixed term tenancies. Most tenancies that started before the 15 January 1989 are secure tenancies. Tenancies commencing on or after the 15 January 1989 are normally assured tenancies, assured shorthold tenancies or fixed term and flexible tenancies, designed to help tackle under-occupation and free up homes for those in greater need. Secure and assured tenancies cannot be converted to fixed term tenancies and these tenants have the right to maintain security of tenure if they apply for a transfer. This should be referenced in registered providers mutual exchange/transfer policies.

3.2. The Council welcomes the use of flexible, fixed term tenancies to improve stock turnover, address under occupation and make best use of Bury's limited affordable housing stock. However, it is keen to ensure that these flexibilities are applied in a way that does not undermine social investment in communities and, protects the most vulnerable tenants by giving them the level of stability they require.

3.3. In order to achieve these outcomes, the Council recommends that fixed term tenancies should be granted for a minimum period of five years. The Council expects registered providers to renew fixed term tenancies upon expiry, unless the terms of the tenancy agreement have been breached, the property is under-occupied/over-crowded or, has been adapted for disability and the tenants no longer require the adaptations or, where the household's financial circumstances have improved to the extent that they no longer require affordable housing.

3.4. The Council urges registered providers to assess the individual needs of tenants/households, in particular vulnerable tenants/households when granting fixed term tenancies and, advocates that long-term tenancies should be offered where the following circumstances exist:

  • disability and illness including terminal and life-long illness
  • households receiving some form of housing related support
  • impact on children and their education/impact on family members
  • carer or caring responsibilities in the locality
  • lack of available suitable alternative accommodation in the locality.

3.5. Where tenancies are not renewed, registered providers should give tenants a minimum six months' notice and support them to secure suitable, alternative accommodation.

3.6. The Council acknowledges that registered providers may, in exceptional circumstances, grant shorter fixed term tenancies for a minimum period of two years. The Council expects registered providers to explain and evidence such circumstances in their tenancy policies. Registered providers must ensure that the tenancies they provide are equitable in practice and compliant with the tenancy standard set by the Regulator of Social Housing.

3.7. The housing reforms within the Localism Act 2011, gave local authorities the power to grant 'flexible' tenancies, rather than secure/lifetime tenancies if they choose to.

3.8. Whilst the Council understands the shift away from lifetime tenancies, it believes that those with the greatest need for affordable housing should be given security of tenure. The average length of tenancy in Council stock is just over ten years, varying from 5 years to just under 20 years depending on the estate and township, compared to an average of around five years for registered provider stock. Therefore, statistically, there appears to be regular turnover of social housing within the Borough.

3.9. Flexible tenancies have significant financial and resource implications, which can be an administrative burden and difficult to manage. There are also risks to cohesion and stability as tenants may be less likely to invest in their homes and communities if their residency is transient. It is also felt that ending security of tenure could result in an increased number of Right to Buy sales, to give residents greater security. This would have a detrimental impact on the affordable housing stock as it is unlikely that the Council would be able to replace these assets.

3.10. Therefore, the Council will continue to offer secure/lifetime tenancies to vulnerable groups, following successful introductory tenancies but, may be required to offer flexible tenancies on any new build properties it develops or acquires in the future, in accordance with guidance from Homes England.

4. Housing for Older People and those with Additional Support Needs

4.1. The Council requires housing providers to provide homes for older people and people with additional support needs including those with long-term conditions such as learning disabilities, autism and mental health, to help them stay local, retain their independence and drive inclusive economic growth in the Borough.

4.2. The Council maintains that older people living in extra care or sheltered housing schemes, and people with additional support needs including those with long-term conditions such as learning disabilities, autism and mental health should always be offered lifetime tenancies. This applies to tenants living in both general housing and specialist/supported accommodation. This gives vulnerable residents greater piece of mind knowing that they will not have to undergo the trauma, upheaval and expense of moving home.

4.3. Where supported housing schemes are being offered to people meeting specific criteria, local allocations policies should be developed to enable providers to support tenants to move to more sustainable accommodation when required. The Council supports the use of local lettings policies where appropriate and encourages registered providers to consult with the Council when developing their policies.

4.4. Where older people and people with additional support needs are under-occupying general needs housing, the housing provider is expected to work with tenants and help them find suitable, alternative accommodation.

4.5. The Council and One Commissioning Organisation expect providers to co-design new housing developments for older people and people with additional support needs with service users, their carers and families, to promote choice and ensure that the new homes meet the needs and aspirations of Bury people to enable them to live well within the community, in accordance with the Council's Housing for those with Additional Needs Strategy.

5. Adapted Properties

5.1. Finding suitably adapted properties for customers in Bury can be problematic, with delays often arising where adaptations need to be undertaken. On the 1st April 2022, there were 388 households on the Council's Waiting List in need of an adapted property. The Council promotes the use of lifetime tenancies for tenants with lifelong support needs including terminal illness and expects registered providers to adopt this stance. This applies to tenants living in both general housing and specialist/supported accommodation.

5.2. The Council will review tenancies where properties have been specifically adapted for individual tenants who no longer require the adaptations and encourages registered providers to do the same, to ensure that maximum benefit is obtained from properties with existing adaptations. Where tenants are displaced, the Council and registered providers must help them find suitable alternative accommodation, in order that the adapted property can be re-allocated quickly according to need. This requirement should be made clear to all tenants when they sign up for a property.

5.3. Where adaptations are considered to be minor or insignificant, the Council and registered providers may, at their discretion, allow the remaining tenants to continue to occupy the property. Decisions should be made on a case-by-case basis, subject to agreed criteria and guidance.

6. Under-Occupation and Over-Crowding

6.1. There is a common perception that more larger properties would be available if people under-occupying them were encouraged to move to properties that were better suited to their needs. Whilst the numbers are relatively small in Bury, the Council advocates that these households should be provided with options and incentives to encourage them to downsize.

6.2. The Council's Allocations Policy allows for downsizing to smaller properties but, with flexibility for tenants who are downsizing to obtain properties that are theoretically larger than their needs. For example, a single tenant living alone in a three-bedroom property may be unwilling to downsize to a one-bedroom property, which they would normally qualify for under the Allocations Policy. In such cases, discretion may be applied to enable an additional bedroom to be obtained.

6.3. The Council recommends that tenants affected by the Bedroom Tax (also known as under-occupancy charge or spare room subsidy) who are at risk of accruing rent arrears, should be given priority to downsize and move to another property within the housing stock, particularly where their circumstances are covered by state benefits.

6.4. Approximately 25 percent of applicants on the Council's Housing Waiting List are currently living in one and two-bedroom properties which are overcrowded. This is due, in the main, to the relatively low numbers of three and four-bedroom properties within the social housing stock. The Council supports the use of mutual exchange and downsizing initiatives to help address over-crowding and under-occupation.

7. Homelessness, Tenancy Sustainment and The Private Sector

7.1. The wider social housing reforms within the Localism Act enabled local authorities to discharge their statutory homeless duties with an offer of private rented accommodation.

7.2. Where homelessness occurs, the Council will, wherever practicable, provide settled mainstream housing to those affected as quickly as possible, to minimise the need for temporary accommodation.

7.3. Due to growing demand on homeless services, lack of funding and increased pressures on the housing stock, the Council will continue to use the private rented sector to discharge its homeless duties where necessary on a case-by-case basis, providing the accommodation is of a reasonable standard, meets health and safety legislation and offers a minimum twelve-month tenancy. This activity is essential in order to prevent homelessness in Bury and help reduce the substantial costs that arise from accommodating households in temporary housing.

7.4. The Council is keen to ensure that decisions to terminate fixed term tenancies do not lead to increased levels of homelessness and recommends that registered providers should give tenants a minimum six months' notice to end a tenancy and assist them in finding suitable alternative accommodation.

7.5. The Council expects registered providers to prevent tenancy failure by proactively identifying vulnerable tenants and those at risk of losing their homes and supporting them to manage and sustain their tenancies throughout the life of the tenancy. The costs associated with failed tenancies can be significant. Every failed tenancy represents additional resource in the allocation and lettings process together with rent loss during void periods and legal costs.

7.6. The Council is committed to preventing homelessness through early intervention and requires all registered providers to work in partnership to help reduce homelessness, repeat homelessness and rough sleeping in the Borough.

8. Affordable Rent Guidance

8.1. The Council acknowledges that registered providers who have entered into funding agreements with Homes England are able to let their properties at affordable rents (80 percent of the market rent), to increase investment in new affordable housing. This may apply to new builds only, conversions of existing social rented stock when it becomes available for re-let or, both. Where registered providers convert stock to affordable rent, they may offer these properties on flexible, fixed term tenancies, as opposed to lifetime tenancies. The Council advocates that registered providers should undertake pre-tenancy affordability assessments with tenants prior to sign up, to ensure that they can afford their rent and future living costs. The Council discourages the use of affordable rent in accommodation specifically designated for older people.

8.2. The Council is keen to avoid situations where some neighbourhoods may contain a disproportionately high level of affordable rent conversions, as this would limit opportunities for social rented tenants to transfer to an area of their choice. Therefore, the Council recommends that affordable rent conversations are spread across a registered providers stock throughout the Borough where practicable. The Council will promote the use of lower cost social rented accommodation where possible.

8.3. If affordable housing is being developed without subsidy from Homes England, the Council would expect the tenure mix to include social rent in accordance with planning policy and the aims and objectives of the Bury Housing Strategy.

8.4. If affordable housing is being developed on Council owned land, the Council would expect the majority of homes to be provided as social rent with 100 percent nomination rights to the Council in perpetuity. It is anticipated that all registered providers operating in the Borough will sign a nominations agreement with the Council.

9. Monitoring

9.1. This Policy will be reviewed annually to take account of any changes in policy or legislation.

10. Appendix 1: Tenancy types and definitions

10.1. The types of tenancies offered by Bury Council and registered providers operating in the Borough include the following:

10.2. Secure or Lifetime Tenancies:

Secure tenancies are granted to existing secure tenants and assured tenants moving from registered provider property into council owned property. Most council tenants are secure tenants. This means that they can occupy a property throughout their lifetime providing they do not breach the terms of their tenancy agreement, following satisfactory completion of a one-year introductory or probationary tenancy. Secure council tenants have specific statutory rights, such as the right to buy their homes after five years. Secure tenancies are usually let at social rents set by the Government (approximately 40 percent of the local market rent).

10.3. Assured Lifetime Tenancies:

Tenants of registered providers are likely to have an assured tenancy if they moved into their home between the 15 January 1989 and the 27 February 1997. Assured tenancies allow tenants to occupy a property throughout their lifetime unless they breach the terms of their tenancy agreement. Assured tenants do not have the same statutory rights as secure tenants and do not normally have the right to buy their home. Assured tenancies can be let at social and affordable rents.

10.4. Assured Shorthold Tenancies:

Assured shorthold tenancies are typically granted for a period of six months but can be longer. After the initial agreed period, the housing provider has an automatic right to evict the tenant without a lawful reason.

10.5. Flexible, Fixed Term and Periodic Tenancies:

Flexible tenancies, also known as fixed term tenancies, can be granted for a minimum term of two years and up to five years, following satisfactory completion of a one-year starter tenancy. If the housing provider does not renew the tenancy agreement or issue a formal notice to end the tenancy on the expiry of the fixed term, the tenant is entitled to continue to occupy the property whilst paying rent. The tenancy then becomes a periodic tenancy. A periodic tenancy rolls on from week to week or month to month with no fixed end date. The registered provider or tenant can end the tenancy at any time providing they give appropriate notice. The Council recommends a minimum of 6 months' notice.

10.6. At the end of the fixed term, tenants are expected to move into the private sector or, remain in the property or another affordable home depending upon their circumstances.

10.7. Flexible and fixed term tenancies are normally let at affordable rents, such as a rent of up to 80 percent of the market rent. The calculation of rent is set by the Regulator of Social Housing.