On July 17, 2024, King Charles III delivered the Labour government’s first King’s Speech to the House of Lords. It set out the new government’s priorities and proposed legislative programme for the next parliamentary session.
Associate solicitor Katie Wright from WHN’s dispute resolution team and property law expert Eleanor Longworth highlight the key residential property updates presented in the speech.
A more level playing field between the rights of landlords and tenants
While acknowledging the contribution that responsible landlords make to the private rented sector, the new government believes that there should be a more level playing field between the rights of landlords and tenants.
This includes the Renters’ Rights Bill, which is Labour’s version of the former Renters (Reform) Bill. The bill is expected to provide renters with greater security and protection and is designed to crack down on discrimination, unfair rent increases and encourage best practices by residential landlords.
The Renters’ Rights Bill will:
- Strengthen tenants’ rights and protections: Measures will include empowering tenants to challenge excessive rent increases where the real purpose is to force out the tenants and ending rental bidding wars.
- Give tenants the right to request keeping a pet: Landlords cannot unreasonably refuse consent.
- Apply a ‘Decent Homes Standard’ to the private rented sector: To ensure homes are safe, secure and hazard-free.
- Apply ‘Awaab’s Law’ (requiring social landlords to investigate and fix reported health hazards) to the private rented sector: This will set out clear timeframes within which landlords must take action to make homes safe.
- Enable creation of a digital private rented sector database: This will bring together key information for landlords, tenants and councils. The aim is to assist tenants in making informed choices and landlords in understanding their obligations.
- Support quicker and cheaper resolution of disputes: This will include a new ombudsman to provide impartial and binding resolutions.
- Make it illegal for landlords to discriminate against tenants in receipt of benefits or with children.
- Strengthen local councils’ enforcement powers: New investigative powers will aim to make it easier for councils to identify and fine unscrupulous landlords.
The Renters’ Rights Bill, which will apply to England, will predominantly be most beneficial to tenants. It is intended that tenants should have the right to live in a property of a good standard and feel secure, and not be subjected to the threat of unfair rent rises or eviction.
The government also intends to abolish section 21 ‘no fault’ evictions. To compensate this, section 8 is expected to be overhauled as part of the Renters’ Rights Bill to offer landlords new, wider grounds for possession.
For now, the traditional route to initiate Section 21 and Section 8 evictions will remain in place. Landlords are advised to continue to use the Section 21 process as it stands, for the foreseeable future. The processes will hopefully be a lot clearer when Section 21 notices are finally abolished, and section 8 is overhauled.
Aside from the main headline points made in the King’s Speech regarding this bill, there is current very little detail.
Strengthening leaseholders’ rights and greater protection for homeowners
The Labour government appears committed to providing homeowners with more rights, powers, and protection over their homes by implementing the Leasehold and Freehold Reform Act 2024, which became law in May 2024, under the previous government.
It also plans to publish a draft Leasehold and Commonhold Reform Bill.
Details regarding the draft bill include:
- Bolstering leaseholders’ rights to extend their lease and take over the management of their buildings by enacting the Law Commission’s 2020 recommendations;
- Modernising the legal framework to restrict the sale of new leasehold flats and moving towards commonhold ownership;
- Regulating existing ground rents; and
- Ending forfeiture for residential leaseholders.
The Bill will apply to England and Wales.
Leaseholders are set to benefit the most from the reforms, by their existing rights being strengthened and new rights being introduced however, the Labour Government has significant work to do before the Leasehold and Freehold Reform Act 2024 will take effect.
Further legislation is necessary in order to implement the Act, in particular relating to the valuation criteria for lease extensions and freehold purchases, which have not yet been determined.
There has been large scale lobbying from landlords and stakeholders regarding leasehold reform and this is expected to continue given that the valuation criteria could have a significant impact upon their investments.
As of yet, we do not know when the draft legislation will be published. It is likely to be several years until there is clarity on the extent of the change and for the new legislation to take effect.
Further information for homeowners can be found in our blog post: The Leasehold and Freehold Reform Act 2024 becomes law – giving homeowners more rights, power and protection.
The Renters’ Rights Bill and the Leasehold and Commonhold Reform Bill are still in their early stages and little is yet known as to the full details of each. WHN will provide further updates going forward when more information is available.
If you would like to speak to our residential property team or one of our landlord and tenant specialists, please contact WHN by completing our online contact form.
You can also contact associate solicitor Katie Wright directly on katie.wright@whnsolicitors.co.uk or senior associate solicitor Eleanor Longworth at eleanor.longworth@whnsolicitors.co.uk.
