My colleague’s insight from October 2024 detailed the changes in the 2024 Autumn Budget, but the changes didn’t stop there. 2024 saw some of the biggest changes in housing law in decades, and 2025 will see many of those changes come into force.
For this reason, affordable housing providers this new year, even more so than many others before, will need to consider how recent changes will affect how they manage their existing properties and how they develop their portfolio moving forward.
Renters Rights Bill
The Renters Rights Bill was rushed through Parliament by the Conservative government just before the general election and has seen one of the biggest changes to property law since 1988. The legislation aims to increase rights and protections for renters and is expected to come into force in the summer of this year.
Abolishment of Fixed-Term Tenancies: all tenancies will be period-assured tenancies with no end date, allowing tenants to terminate at any time on two months’ notice whilst landlords will have to serve four months’ notice to terminate and will be limited in the circumstances in which eviction can occur, as mentioned below.
Possession Proceedings: Landlords will have to cite one of the grounds for possession under Section 8 of the Housing Act 1988 (as amended). These provisions have been broadened and are expected to include the new grounds for social landlord (or charity in the third point below) where:
- The property needs to be let to someone based on employment eligibility; or
- The property was let to the tenant based on their employment eligibility, but they no longer meet the criteria; or
- Property is let to a tenant meeting eligibility criteria at an “affordable rent” to help them access PRS and/or transition to living independently and the tenant no longer meets the eligibility criteria, or a limited period has come to an end.
The Bill also imposes other requirements regarding possession proceedings including longer notice periods for all grounds for eviction, mandatory proof of deposit protection for a Section 8 eviction and an updated set of definitions for anti-social behaviour of a tenant in the eyes of the court amongst others.
Rent Reviews: Rent will only be able to be increased once a year, following service of proper notice, and only to market rate. Tenants will also be able to challenge increases at the tribunal.
Pet ownership rights: tenants will have the right to request permission for pets, which cannot be unreasonably refused. Landlords will have the right to require payment of pet insurance however so we expect leases to include provision for this where possible moving forward.
Leasehold and Commonhold Reform Bill
The Leasehold and Commonhold Reform Bill is Labour’s answer to the Renters Rights Bill and was one of the centrepieces unveiled in the King’s speech. The Bill is set to introduce a few key changes:
- Regulation of ground rent for existing leaseholders
- Right to manage – providing more rights to leaseholders to manage their own properties
- Removing the threat of forfeiture over small arrears
- Reinvigorate commonhold tenure – restricting the sale of new leasehold flats so that commonhold becomes the default tenure.
The Bill is hoped to also provide additional clarity on the areas which fall short in the rushed Renters Rights Bill. A draft of the Bill has not yet been released but is expected in February this year.
Leasehold and Freehold Reform Act 2024
This Act is expected to come into force later this year or early 2026 and is long anticipated for leaseholders and freeholders alike.
The Act aims to make it easier and cheaper for leaseholders to extend their lease, by abolishing marriage value and placing a cap on ground rent repayment in the lease extension calculation. The proposal to abolish marriage value has been met with significant resistance from freeholders however which is set to continue into 2025. Landlords might expect a lull in lease extensions for leaseholders with over 80 years left.
Ventured into Development?
We know a lot of Registered Providers and Councils alike have started developing to help facilitate the growing demand for affordable housing so here is a summary of the main changes for developers:
- Building Regulation Changes – changes to building control regime for all construction projections including new competence requirements and duty-holder regime. Whilst these do apply to all developments started after 1 October 2023, construction of buildings over 18m or seven storeys are particularly affected in light of the cladding and safety defects and remediation works in recent years.
- Net Zero and EPCs – Given the government’s target of reaching net zero by 2050 and the recent COP28, sustainability in housing is a consistent focus. New regulations are expected to focus on the whole-life carbon impact of newly constructed buildings and improving the energy efficiency of homes. The previous Conservative Government had planned to raise the minimum EPC rating from “E” to “C” for all newbuilds in 2025 and existing properties by 2028. The increase was dropped by Rishi Sunak earlier in 2024 and the 2028 deadline has been delayed until 2030, however, energy efficiency should be a consideration for developers to prevent any large expenses from getting properties up to par in the future. It is expected that Development Agreements, Construction Contracts and leases are likely to include supply chain and operational requirements to ensure adherence to regulations regarding energy efficiency and EPC ratings and to strive towards net zero buildings.
- Energy – Renewable energy is expected to remain a key agenda item, including an increase in solar PV on sites and housing (meaning more of those Solar PV leases!) and increasing consideration for on-site energy generation.
How can Tozers help?
At Tozers, we understand the complexities and challenges that come with navigating these significant changes in housing law and regulations. Our team of experienced legal professionals is here to provide you with expert advice and support tailored to your specific needs. Whether you need assistance with compliance, possession proceedings, lease extensions, or development projects, we are committed to helping you manage your properties effectively and develop your portfolio strategically. Contact us today to learn how we can assist you in adapting to these new regulations and achieving your goals.
