JUNE - 2024
Introduction
With the surprise announcement of a snap election to take place on 2 July 2024, Parliament was ordered to close by King Charles to allow political campaigning. This forced the House of Lords to prioritise Bills capable of becoming law in their final sitting on 24 May 2024. Despite being introduced to Parliament over 12-months ago, the Renters Reform Bill was incapable of being passed due to delays caused by ongoing amendments. This has given rise to widespread disappointment, although it is possible the next government will seek to re-work the proposed Bill rather than starting from scratch.
In more positive news, the long-awaited Leasehold and Freehold Reform Act did progress. This seeks to address complex leases and escalating ground rents which had made leasehold property difficult to deal with in terms of sales and the private rental sector (PRS) for generations. The new law aims to make it easier and cheaper for owners to extend their leases, buy freeholds or take over management of their buildings, with information about leasehold property to become more transparent. Regrettably, proposals to ban ground rents entirely, or cap them at £250 as previously indicated were dropped by Michael Gove leading to condemnation and allegations of watering down the provisions. ARLA Propertymark had lobbied the government to incorporate regulation of property agents, although frustratingly, this was not included.
Election polls strongly indicate a change of government with the Labour Party likely to take control. Whilst party manifestos are yet to be released Labour published a report by the Private Rental Sector Commission in May 2024 which may provide some insight.
Key Points – Labour Commission Report:
- Annually updated PRS Decent Homes Standard
- One system for England and Wales (as per Rentsmart Wales)
- Renters Charter and Landlords Code of Conduct
- National registration, training and accreditation of landlords and agents
- Stricter sanctions for breach
- Replacing rent review clauses – single annual increase ( 4-months’ notice) linked to local wage growth/CPI
- Move to open-ended periodic tenancies – terminated on strictly defined grounds
- Abolition of S21 evictions
- Removal of eviction powers when selling to/ allowing family to reside
- Making pet insurance a permitted charge under the Tenant Fees Act
- Introducing measures to avoid alternative short-term let options being adopted
Aspire Residential’s perspective is that
It is clear that housing ownership and standards will be key manifesto points for all parties, who are likely to either revise the Renters Reform Bill or legislate further. In particular;
- Housing standards/safety and tenant security of housing are likely to be central issues.
- Any abolition of S21 evictions is still likely to be countered by enhanced S8 provisions.
- The requirement for a register of landlords/ agents and increased regulation is likely to be proposed by all the political parties.
- It is probable any new government will seek to cap or abolish ground rents in respect of leasehold property.
Any proposed legislation by a future government will be subject to the same scrutiny though Parliament as previous Acts and may take time to become law. Ultimately, there should be a balance between landlord and tenants’ rights.
We will continue to publish updates as any new government determines its priorities and the timescales of any new legislation.
