The Thatcherite revolution put an end to that with the introduction of Assured Shorthold Tenancies (ASTs) in the 1988 Housing Act. Now landlords could set rents at the market level, raise them annually and offer fixed-term contracts, typically lasting six or 12 months - one of the most landlord-friendly arrangements in the world. Capital once again flowed into the private rented sector, particularly after the introduction of buy-to-let mortgages in the mid 1990s.
But have ASTs in turn reached the end of their shelf life? A thought-provoking new report by housing charity Shelter argues for a fresh overhaul of the system, claiming it would benefit tenants without unleashing another destructive wave of property disinvestment by landlords.
The main thrust of the argument is that the private rented sector is no longer the beast envisaged by William Waldegrave, the minister who launched ASTs in 1988 to serve "the new needs of the people, many of whom are now more mobile". With access to owner-occupation now limited by high house prices and risk-averse lending, nearly a third of all households that rent privately are families - some 1.1m in total - and nearly half are aged 35 or over.
Shelter argues that these need a more permanent form of tenure, and therefore calls for the AST to be replaced by a 'Stable Rental Contract'. This would last for five years, during which the tenant could not be evicted without good reason. The only exception would be if the landlord wanted to sell the property. Landlords would also be barred from increasing rents by more than inflation. Crucially, the contract would be asymmetric - tenants could leave with two months' notice.
Landlords will naturally be suspicious of policy suggestions from Shelter. But this report is, in fact, pretty well-balanced between the needs of tenants and those of landlords. Attuned to the lessons of history, the authors have paid careful attention to landlord returns by commissioning property broker Jones Lang LaSalle to model data from nine portfolios. They came up with the intuitive conclusion that longer tenancies are good for landlords. By reducing void periods and maintenance costs and embedding rental increases into leases, their Stable Rental Contract might even improve cash returns.
That, of course, beggars the question why it is not already common practice. One reason may be that cash returns have not always been king. Having enjoyed strong capital growth between 1995 and 2007, many landlords pay more attention to house prices than to net rental yields, which is where voids might betray a problem with their tenancy arrangements. But that may change - most housing analysts, including Jones Lang LaSalle, expect income returns to become much more important to buy-to-let investors.
Landlords usually point to a more concrete barrier to the introduction of five-year rental contracts - banks usually prohibit them. That's because homes (unlike shops or offices) are more valuable vacant, when they appeal to the dominant owner-occupier market as well as investors. In the event of a default, banks do not want to take a haircut on the property sale simply because there is a sitting tenant.
But Shelter's Stable Rental Contract could be broken if the landlord wanted to sell the property, and presumably that could be extended to lenders. Banks would need to understand this if they were to remove the restrictive clause - which may be asking a lot of organisations that have turned risk assessment into a box-ticking exercise. But the barrier does not seem insurmountable, and it only applies to those landlords with buy-to-let mortgages.
Another set of culprits could be the lettings agents. One of the most revealing facets of Shelter's research was a 'mystery shopping' trip to estate agents, which suggested that many justify ongoing charges to landlords by encouraging them to issue new contracts every year. Landlords clearly need to be alive to such tactics, which reduce their returns. But this is surely not a serious obstacle to change: if landlords asked explicitly for five-year contracts, agents would bow to the client.
The most controversial aspect of Shelter's report is the underlying assumption that tenants would prefer longer-term tenancies. Perhaps 12-month contracts are the current norm simply because they meet the needs of both tenants and landlords. "The reality is that tenants don't want to sign up," claims Alan Ward, chairman of the Residential Landlords Association.
Shelter commissioned a YouGov survey of private renters, but its findings are far from definitive. It found that "two-thirds of private renters would like to have the option to stay in their tenancy longer term". But it costs nothing to endorse an option. It's less clear that renters would embrace fixed rental uplifts, as envisaged in Shelter's five-year contracts. Many tenants probably benefit from the status quo, whereby most landlords are happy not to raise rents as long as the occupiers pay it on time and look after their property.
Shelter also found that 44 per cent of tenants with families did not consider their private rented house a 'home'. As the report notes, this is a "startling" percentage. But would five-year contracts reduce it? It is not implausible that the idea of home is inseparable from that of ownership in the minds of those 44 per cent. Changing Britain's psychology of home ownership will take far more than a Stable Rental Contract.
