On Tuesday 10th May, the Queen’s Speech confirmed that a radical re-shaping of the rental sector in England is being pushed ahead by the government. A total of 38 pieces of legislation were introduced so in this article we're taking a closer look into which of these affect the property industry, and more specifically the impact the new legislation will have on landlords.
Although the relatively brief speech delivered by Prince Charles - deputising for Her Majesty - made superficial reference to housing and planning, details released just after the speech put flesh on the bones.
A Bill will abolish what the government has called 'no fault' evictions - section 21 evictions - “giving renters better rights when they are told to leave despite complying with the terms of their tenancy.”
The details also say that there will be additional reform of landlords' grounds for possession to give them greater powers to tackle repeated rent arrears or anti-social behaviour among tenants.
In addition, a new ombudsman for private rented landlords will ensure disputes can be easily resolved without going to court.
“These reforms will help more people own their own homes” according to the government.
The Leasehold Reform Act 2022 will come into force on 30 June, and this will - amongst other things - stop landlords requiring ground rent for new long residential leases.
It will also mean banning new leasehold houses to ensure that all new houses built are freehold.
The government has given details of the Renters Reform Bill, which will:
- Remove Section 21 of the Housing Act 1988 providing in the government’s words “security for tenants in the private rented sector and empowering them to challenge poor practice and unfair rent increases without fear of retaliatory eviction”
- Reform possession grounds for landlords, “introducing new and stronger grounds for repeated incidences of rent arrears and reducing notice periods for anti-social behaviour, ensuring that they can regain their property efficiently when needed”;
- Apply the legally binding Decent Homes Standard in the Private Rented Sector for the first time ever, giving tenants safer, better quality, and better value homes;
- Introduce a new Ombudsman for private landlords “so that disputes can easily be resolved without the need to go to court, which is often costly and lengthy, and ensure that when residents make a complaint, landlords take action to put things right”;
- Introduce a new property portal to help landlords understand their obligations, give tenants performance information to hold their landlord to account as well as aid local authorities.
And the government says: “We will shortly publish a White Paper which will set out more detail on our proposals for landmark reform in the private rented sector."
Whilst we are currently waiting on the White Paper to be released, we will have all the info on this blog when it is released, along with how we'll help our landlords to stay compliant. Remember to check back here for more info!
Crackdown on second homes?
In the lead-up to the Queen's speech, it was widely speculated that there would be a crack-down on second homes, but for those hoping to get answers, there was no decisive information.
It is still anticipated that councils will be given the power to increase council tax up to 100% on second homes that are not let nor used by their owners for at least 70 days per year.
If this is to be the case, it is even more important than ever to get any property you aren't using or are struggling to let in a condition to let out and be ready for tenants to occupy it.
Net Zero Focus & Climate Change
What we also saw in the Queen's speech as expected was more information on how the Government will move forward with its target of reducing the country's net carbon emissions to zero.
The transition towards net-zero emissions has already had ramifications for the property industry, with all new homes needing to cut their emissions by 30% from 15th June, along with other new requirements that will be in place to help prevent domestic overheating. With these measures expected to increase the cost of building homes, we're anticipating the price of new build properties to increase in line with this, making them a less appealing investment for landlords looking to add to their portfolio.
Although there was some important information for landlords in the Queen's speech, with such major changes set to take place it is crucial that you keep an eye out for the Government's White Paper on the reforms planned for the private rental sector.
If you're a landlord and you want to know how the renter's reform bill and future changes could affect your property portfolio, book a call with one of our team below and we'll be happy to walk you through the changes and what you need to do in more detail.
