Under the system of protected and statutory tenancies, tenants had the right to stay in a landlord's property almost indefinitely and pass the tenancy down to relatives. The difficulties landlords could face in trying to regain possession of their property created disincentives to owners' letting properties, which along with the fact that most council houses had been sold caused a housing shortage. In 1979, a Conservative government headed by Margaret Thatcherwas elected. Thatcher sought to revamp the rented sector. At the time of the Housing Act 1988's enactment, the private rented sector accounted for less than 8 percent of homes in Britain, down from 76 percent in 1918, while social housing was about 30 percent. The Department of the Environment's 1987 white paperHousing: the Government's Proposals set out goals of reversing the decline in rented housing and improving its quality; giving council tenants the right to transfer to other landlords if they so desired; targeting money more accurately on the most acute problems; and encouraging the growth of home ownership. According to the white paper, public housing authorities had failed to adequately accommodate the wishes of tenants, causing resentment and lack of tenant commitment to their homes; the government sought to alleviate this by giving tenants greater consumer choice, which would be accomplished by offering a variety of forms of ownership and management. Council tenants would be given the right to buy, and private landlords' rights would be strengthened. Specifically, under the new law, in contrast to the old fair rents system, landlords were allowed to charge whatever they liked, with only two exceptions. Rent could be challenged by assured shorthold tenants during the first six months of the tenancy, if a tenant believed his rent was more than the current market rent for his property, in which case he could refer the rent to the Rent Assessment Panel for review. However, few would want to do this, given landlords' right to give a section 21 notice and end the tenancy. Tenants could also challenge the rent upon service of an annual notice to increase rent at the end of the fixed term; but landlords could avoid this by increasing the rent via a renewal tenancy agreement. The Housing Act also provided for two types of tenancy, the "assured" tenancy and the "assured shorthold tenancy". The latter is preferred by most private sector landlords, as it gives them the right to end the tenancy at any time after service of a section 21 notice. Typically, in a situation where there is a private landlord and a tenancy that began on or after 28 February 1997, and in which the house or flat is let as separate accommodation and is the tenant's main home, the property is being let on an assured shorthold tenancy.
