Kevin Shaw, nationwide gross sales managing director, Romans (an LRG firm)
After 14 years of the Conservatives being in energy, Labour lastly took over the reins in July 2024, promising to be way more centered on ramping up the availability of inexpensive new properties, giving tenants extra rights and doubling down on its dedication to Web Zero.
When Parliament was dissolved forward of the election, there have been two vital items of housing laws underway that also wanted extra work: the Renters (Reform) Invoice and the Leasehold and Freehold Reform Act.
On the time, Labour advised us they’d:
- Ship “a blitz of planning reform to rapidly enhance housebuilding to purchase and hire and ship the most important enhance to inexpensive housing in a era.”
- Scrap the Renters (Reform) Invoice and substitute it with their very own model – with Angela Rayner quoted as saying Labour would “ban ‘no-fault’ evictions with no caveats on its first day in energy”.
- Abolish leasehold and substitute it with commonhold – though not inside the first 100 days.
- Uphold the Tory housebuilding goal of 300,000 new properties a 12 months, committing to 1.5m inside their first 5 years.
- Construct the subsequent era of ‘new cities’ with 40% of the inventory inexpensive housing.
- Introduce a Heat Properties Plan to chop family payments by as much as £500 a 12 months and provides native councils the facility and funding to improve properties.
So, one 12 months on, how a lot progress have they made?
Planning reforms
On eleventh March, Labour’s Planning and Infrastructure Invoice was launched in Parliament, and it has now reached the Committee Stage within the Home of Lords.
Rental reform (England solely)
That is one space of housing coverage they’ve moved rapidly on, as promised. The Renters’ Rights Invoice (RRB) was launched to Parliament and had its first studying on eleventh September 2024. Whereas most of the measures have been similar to these within the earlier Conservative Invoice, the RRB does go additional in the direction of favouring tenants’ rights.
Whereas we await the passing of the Invoice, there are three key issues to notice:
- Though Labour promised to scrap Part 21 as quickly as attainable, this hasn’t occurred but.
- Whereas varied amendments have been made all through the progress of the Invoice, two of probably the most vital for landlords to concentrate on are:
– Landlords gained’t have the ability to require tenants with pets to get pet harm insurance coverage or pay in the direction of a landlord’s coverage. Within the authentic model of the Invoice, this was to turn into a permitted cost underneath the Tenant Charges Act.
– If tenants unsuccessfully problem a hire enhance, the First Tier Tribunal will have the ability to backdate it to the owner’s authentic Part 13 discover. In earlier variations of the Invoice, the flexibility to backdate the rise had been eliminated, so that is excellent news for landlords! - Plans to increase the First rate Properties Commonplace to the PRS are nicely underway – a overview of the present model has been accomplished, and a session has been launched into the Authorities’s proposed modifications.
Leasehold reforms
On the finish of January, the primary of the measures within the Leasehold and Freehold Reform Act, which was handed underneath the Conservative Authorities in Might final 12 months, was enacted. This was Part 27, which removes the two-year possession rule, which means that leaseholders can now prolong their lease or purchase the freehold as soon as they’ve bought a leasehold property with out having to attend two years.
The second change got here into pressure on third March, giving extra leaseholders of flats the best to handle the property themselves. Leaseholders merely have to arrange their very own administration firm and serve formal discover on their landlord/freeholder – there’s no want to hunt permission. After a set interval, the administration transfers, and there’s not any requirement for leaseholders to cowl the freeholder’s authorized charges.
The Authorities has additionally now launched its White Paper on a brand new Commonhold mannequin, with plans to introduce a Invoice later within the 12 months.
New housebuilding
In accordance with evaluation by BBC Confirm, each area of England had a year-on-year fall in new properties within the first six months of Labour being in energy, with round 107 new properties recorded within the second half of 2024, a drop of 10% on the identical interval in 2023. With an annual goal of 300,000, this places Labour nicely behind.
Nevertheless, in a optimistic step, the Authorities lately introduced a brand new £39bn Social and Inexpensive Properties Programme, as a part of their wider Plan for Change. 60% of the properties might be for social hire, with 40% out there for different tenures, together with shared possession and inexpensive hire. That is the most important enhance to grant funding in a era.
New everlasting Mortgage Assure Scheme introduced
On the finish of June, the earlier government-backed mortgage assure scheme ended. Nevertheless, Labour has introduced a brand new model of the scheme will start in July, enabling extra eligible first-time patrons and residential movers to purchase a house with a deposit as small as 5%. The Financial Secretary to the Treasury stated this can “assist to incentivise and maintain availability of 91% to 95% loan-to-value mortgages by means of the financial cycle by offering lenders with a government-backed assure”.
Abstract of property market exercise and laws underneath Labour
- eleventh September 2024 – RRB launched to Parliament and commenced passage by means of Home of Commons.
- fifteenth January 2025 – RRB had 1st Studying within the Home of Lords.
- thirty first January – Two-year possession rule eliminated for leaseholders.
- seventh February – 12-week session launched on enhancing power efficiency of privately rented properties.
- third March – Proper to handle given to leaseholders and Commonhold White Paper launched.
- eleventh March – Planning and Infrastructure Invoice launched to Parliament.
- 1st April – SDLT charges revert to pre-2022 bandings and charges.
- twentieth June – Session on administration of Council Tax launched.
- 1st July – RRB Report Stage started in Home of Lords.
- 2nd July – First rate Properties Commonplace session launched.
- 2nd July – New Social and Inexpensive Properties Programme introduced.
- July – New mortgage assure scheme introduced.
All in all, plainly though Labour hasn’t managed to get their proposals enacted as rapidly as they stated of their manifesto and the early days of presidency, however they’re making cheap progress. The RRB is within the closing phases and appears set to cross into legislation within the second half of 2025, though it would take time for the assorted completely different measures to come back into pressure. And whereas they’re falling quick on new housebuilding numbers, there are consultations and monetary injections underway that ought to help an acceleration on this.
