The King's Speech was delivered at the opening of parliament, following Labour’s landslide victory at the polls. The speech announced some 40 different pieces of legislation! It would appear the much heralded ‘change’ that was promised as part of Labour’s manifesto will soon be upon us. Although the timetable for the introduction of the Bills to Parliament is not yet known, it seems likely that a number of the Bills will be with us sooner rather than later.
At the forefront of the changes that are likely to directly impact the RP sector is the Renters Rights Bill, which is a non-too-imaginative re-naming of the Renters (Reform) Bill, introduced in the last parliament. It appears the new Bill will carry through a number of the recommendations from the ‘Reform’ Bill, with the flagship abolition of non-fault eviction / s21 set to proceed. According to the government's assurances, tenants' rights will be further strengthened by the measures.
The briefing paper says, amongst other things, the Bill will:
· Abolish Section 21 ‘no fault evictions’, removing the threat of arbitrary evictions and increasing tenant security and stability. New clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to.
· Strengthen tenants’ rights and protections, for example, we will empower tenants to challenge rent increases designed to force them out by the backdoor and introduce new laws to end the practice of rental bidding wars by landlords and letting agents.
· Give tenants the right to request a pet, which landlords must consider and cannot unreasonably refuse. Landlords will be able to request insurance to cover potential damage from pets if needed.
· Apply a Decent Homes Standard to the private rented sector to ensure homes are safe, secure and hazard-free – tackling the blight of poor-quality homes.
· Apply ‘Awaab’s Law’ to the sector, setting clear legal expectations about the timeframes within which landlords in the private rented sector must make homes safe where they contain serious hazards.
· Support quicker, cheaper resolution when there are disputes – preventing them from escalating to costly court proceedings – with a new ombudsman service for the private rented sector that will provide fair, impartial and binding resolution, to both landlords and tenants and reduce the need to go to court.
It will be interesting to see how quickly the Renters Rights Bill is introduced, as this is likely to provide a decent marker for other legislative changes.
The other areas that have the potential to significantly impact the sector are the announcements in relation to Planning and Infrastructure and Leasehold reform.
Focusing on leasehold changes initially, there was a commitment to bring into force the provisions of the Leasehold and Freehold Reform Act 2024 at pace. This will only require the introduction of secondary regulations so we could see this implemented quickly, and it should provide the necessary certainty over lease extensions and enfranchisement that has seen this market stall since the Leasehold & Freehold Reform Bill was first announced. It will also bring further welcome clarity on service charges and administration charges and on the extension of the right to manage.
There was also the promise of a Leasehold and Commonhold Reform Bill which is likely to include some contentious changes. The briefing document for this states:
The Government will take steps to bring the feudal system of leasehold to an end and reinvigorate commonhold by:
- enacting remaining Law Commission recommendations to bolster leaseholders’ fundamental rights to extend their lease and buy their freehold (enfranchisement), and take over the freeholders building management functions (Right to Manage).
- reinvigorating commonhold by modernising the legal framework. We will also restrict the sale of new leasehold flats. The Government will consult on the best way to achieve this so that generations to come will benefit from absolute homeownership.
- tackling existing ground rents by regulating ground rents for existing leaseholders so they no longer face unregulated and unaffordable costs.
- bringing the injustice of ‘fleecehold’ private estates and unfair costs to an end – the Government will consult on the best way to achieve this and implement new protections for homeowners on private estates in the Leasehold and Freehold Reform Act 2024.
- ending the injustice of forfeiture so that leaseholders are protected against losing savings they have in their home for potentially small unpaid debts.
This will certainly be a more challenging Bill to implement, with complex and significant changes proposed that will need much time and deliberation to get right.
In Labour’s pre-election manifesto, they pledged to get Britain building again and promised the delivery of 1.5 million homes over the course of the next 5 years. At the heart of their ambitions to deliver this is the Planning and Infrastructure Bill, the briefing document on this states:
The Planning and Infrastructure Bill will accelerate housebuilding and infrastructure delivery by:
- streamlining the delivery process for critical infrastructure including accelerating upgrades to the national grid and boosting renewable energy
- further reforming compulsory purchase compensation rules to ensure that compensation paid to landowners is fair but not excessive where important social and physical infrastructure and affordable housing are being delivered.
- improving local planning decision making by modernising planning committees.
- increasing local planning authorities’ capacity, to improve performance and decision making, providing a more predictable service to developers and investors.
For those in the housing sector, interesting times are ahead.
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