“Security of tenure” is a fancy way of saying “How hard is it to kick you out of your house”.
- Assured Shorthold Tenancy (AST). This is your common or garden bog standard tenure often known as private renting. You hold a lease which is guaranteed to be yours for 6 or twelve months, but after that it is up to the landlord. Land lord wants to redecorate? You can be chucked out. Landlord want to sell with a vacant house? Out you go. Landlord fancies renting it to richer folk? Bye then. You have no security of tenure.
As you can see this is a very insecure way of holding a house, and puts you and your kids at the mercy of the volatile housing market.
- Owner occupied: this is where you simply buy a house, usually buying about 5-10% of it with cash ( the deposit) and the other 90-95% of it with a mortgage from a bank or building society. The big difference between and AST and owning your house is, ideally , as every month goes by, you own more and more of the bricks of your house as you pay off the mortgage AND the ONLY reason you can get kicked out, is if you fail to make the mortgage payments on time. Even then, it is hard for the bank to get the house back from you, and you usually get some time to put your finances back on track to pay the mortgage again. Obviously, short of owning all of your house, this is super secure tenure.
- Part rent part buy: also known as shared ownership. This advantage is that in order to get on the ladder of property ownership, the amount of cash you need to put down a deposit is significantly smaller than usual. After paying any (heavily discounted) deposit which buys outright a portion of the house, the other part of the price is paid using rent. So you rent part and you buy part. However, you need to pay close attention to the rental part of the contract ( the lease), which can bite you on the bum if you breach any of the parts of the lease. So just because the landlord wanted to rent to richer people, would not be a good enough reason for them to bring the tenancy to an end.But, rent arrears, nuisance behavior or subletting would be a breach and render you open to termination of the lease by the landlord. There will be service charges too and it is really important to insist on an explanation of all of the terms of the purchase from your conveyancing solicitor before you sign on the dotted line. In practice almost all of such ownership schemes are run by social housing landlords who are not as driven by pure profit as a private landlord. This kind of ownership is a good way of getting out of short term in secure private rented accommodation. It pegs your hard earned cash to the rest of the housing market, as well as allowing you to buy more of the house, when you are ready.
Those are the most common ways of owning house in the UK, there are lots of other sorts of tenure like secure tenancies from a local authority, tied property (where the house goes with the job) or a regulated tenancy which has been in being since 1989.
Having a basic understanding of your legal rights to home ownership is very important if you are splitting up. We meet a lot of clients who tell us their ex-partner is very keen to “help” them move into private rented accommodation, when this is clearly not a good idea.
If you need legal advice about family matters, why not contact us to make a first appointment. It cost £60 and takes as long as it takes. Reading office 01183 211 112 or Oxford office 01865 311 112.