So, the King’s Speech today (17 July) and the legislative programme of the new government. What does it hold for housing?
There were few surprises, I suppose, given the Labour manifesto commitments, but we can now be sure that two housing/leasehold related things will be happening.
First, there will be a Renters Rights Bill. From the description in the briefing to the Speech, (below), this unsurprisingly largely resembles the late Renters (Reform) Bill (abandoned by the Tories in the dying days of the last Government) in the headlines, but with some key differences. The most notable being the extension of Awaab’s Law (currently awaiting the regulations to put it into force) to the private sector as well as to social tenancies. If the regulations resemble the consultation proposals (our note) this will be a bit of a challenge to both practices and mind sets of social and private landlords. The other major difference is a statement that ‘we will empower tenants to challenge rent increases designed to force them out by the back door and introduce new laws to end the practice of bidding wars’. The shape of both of these will be important.
However, what will be really interesting to see is the detail of the Bill. Labour proposed quite a few amendments to Renters Reform. Will those amendments shape the Bill?
The briefing paper says the Bill will carry out:
o abolishing 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.
o strengthening 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.
o giving 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.
o applying 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.
o applying ‘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.
o creating a digital private rented sector database to bring together key information for landlords, tenants, and councils. Tenants will be able to access information to inform choices when entering new tenancies. Landlords will be able to quickly understand their obligations and demonstrate compliance, providing certainty for tenants and landlords alike. Councils will be able to use the database to target enforcement where it is needed most.
o supporting quicker, cheaper resolution when there are disputes – preventing them 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 reducing the need to go to court.
o making it illegal for landlords to discriminate against tenants in receipt of benefits or with children when choosing to let their property – so no family is discriminated against and denied a home when they need it.
o strengthening local councils’ enforcement powers. New investigatory powers will make it easier for councils to identify and fine unscrupulous landlords and drive bad actors out of the sector.
And then there is leasehold reform.
There is a welcome commitment to bring into force the provisions of the Leasehold and Freehold Reform Act 2024 at speed. This is entirely a matter of regulations so can be done without any significant burden on parliamentary time. (It is worth noting that there are a lot of Bills in the Kings Speech – this will be a very busy parliamentary session.) This is a necessary move, one that will give certainty over aspects of lease extensions and enfranchisement, on rules on information about service charges and administration charges, on extension of right to manage and so on. A commitment to a speedy introduction is to be welcomed.
On further leasehold reform, there is a promise to lay a draft Leasehold and Commonhold Reform Bill before Parliament.
Now, for clarity, this is not saying that the Bill will be introduced this session. I very much doubt that it will. I think it is unlikely before 2025.
But putting forward a draft Bill, particularly on what is likely to include some highly contentious changes (capping/removing existing ground rents for example) is both practically sensible and legally astute – the more consideration Parliament has given, the less successful potential legal challenges are likely to be. Plus, the apparently proposed changes are complex and will need time and considerable thought to turn into a Bill.
A draft Bill is also a form of promise for the future…
The briefing document says this:
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.
Being able to see detailed proposals in a draft Bill will be very helpful in ironing out potential issues.
So, lots to look forward to. Not enough for some, inevitably (and those calling for private sector rent control, like the 4 Green MPs, have yet to identify the model of rent control that they consider actually works – when they actually do, we might take them seriously on this, but not before), and doubtless there will be a need for further legislation in the future. But for a first Parliamentary session, this is a pretty exciting programme on housing law.