We look at some of the new government’s key proposals set out in the King’s Speech 2024 so far as they impact on landlord and tenants of tenancies both short and long, and measures that may be relevant to commercial landlords and other landowners.
WolfBite - the key takeaways
• The Renters’ Rights Bill will cover similar ground to the Renters (Reform) Bill before it, including abolishing section 21 “no fault” evictions, but with some notable additions designed to improve housing standards in the private rented sector.• The Leasehold and Commonhold Reform Bill will implement measures already contained in the Leasehold and Freehold Reform Act 2024, but go further by potentially doing away entirely with leasehold ownership in favour of commonhold, addressing existing onerous ground rents and ending forfeiture of long residential leases.
• The English Devolution Bill will give local communities a “right to buy” empty shops, pubs and community spaces.
• The Planning and Infrastructure Bill will streamline the planning process to accelerate housebuilding and the delivery of major infrastructure projects.
What is the Renters’ Rights Bill?
The King’s Speech states that the new bill will:
• Abolish section 21 “no fault” evictions.
• Introduce new, wider, grounds for possession for landlords.
• Empower tenants to challenge rent increases.
• Bring measures in that will end bidding wars between prospective tenants.
• Give tenants a right to request permission to keep a pet.
• Apply a “Decent Homes Standard” to the private rented sector, ensuring properties meet minimum levels of repair and safety.
• Extend “Awaab’s Law” to the private rented sector, requiring health hazards to be investigated and fixed in a timely manner.
• Create a digital database with key information for landlords, tenants and councils.
• Introduce a new private rented sector Ombudsman to reduce the need to go to court.
• Make it illegal to discriminate against those in receipt of benefits or with children.
• Strengthen local council’s enforcement powers.
Labour’s Renters’ Rights Bill will therefore cover very similar ground to the Conservative Party’s Renters (Reform) Bill (see Renters (Reform) Bill: will it re-form the private rented sector?) that fell when Parliament was dissolved in May.
There are, however, some notable differences.
For example, the proposal to extend the Decent Home Standard and Awaab’s Law to private landlords, outlawing blanket bans against tenants in receipt of benefits or with children, and ending rental bidding wars did not feature in the Renters (Reform) Bill.
There are also areas where we do not yet know whether Labour’s Bill will take a different path to the Conservative’s Bill. In particular, it is not yet known if the Renters’ Rights Bill will go as far as doing away with ASTs and fixed term tenancies altogether in favour of rolling periodic assured tenancies.
There are also some indications, including in a subsequent debate on the King’s Speech in the House of Lords, that the new government might consider lengthening the notice periods for certain grounds for possession.
The King’s Speech is necessarily only a high-level summary of future intentions. We will therefore have to wait to see the detail once the Renters’ Rights Bill is published.
What is the Leasehold and Commonhold Reform Bill?
This new bill will:
• Bring the remaining provisions of the Leasehold and Freehold Reform Act 2024 into force (see Which provisions included in the Leasehold and Freehold Reform Act 2024 (LFRA 2024) are now in force?).
• Enact other provisions previously recommended by the Law Commission to strengthen leaseholders’ rights to extend their leases, buy their freehold and exercise the right to manage their buildings.
• Reinvigorate the use of commonhold (where each flat owner owns the freehold of their home and becomes a member of a commonhold association that owns and manages the common parts), taking steps to end the “feudal leasehold system”.
• Restrict the sale of new leasehold flats.
• Regulate existing unregulated and unaffordable ground rents.
• End forfeiture for residential leases.
The calls to end leasehold ownership, and push for commonhold to be the default, are not new. The previous government said the same thing. There is a good argument for saying that the problem is not necessarily with the system of ownership, or what it is called, but with how communal buildings/estates in which people own individual units are actually managed. The King’s Speech does not, however, say anything about taking forward work previously started that looked at how to improve the standard and regulation of letting and managing agents.
Addressing onerous ground rents in existing long leases is much needed, and to be welcomed.
Perhaps the most striking measure, however, is the proposal to end forfeiture for long residential leases.
It is already very difficult for landlords to forfeit long residential leases, with many hurdles to overcome. Removing the right to forfeit entirely will, though, be a step change.
Whilst the arguments the new government puts forward in favour of ending forfeiture of residential leases are laudable - namely, that the threat of forfeiture for small amounts of arrears can cause significant distress and ultimately result in landlords receiving an unfair windfall - there are situations where other enforcement options are ineffective. It is not yet clear whether those other methods of enforcement will be strengthened or supplemented.
The details of the bill are awaited with interest.
What is the English Devolution Bill?
This proposed bill will, amongst other things, include a new right for local communities to buy valued community assets such as empty shops, pubs and community spaces.
The intention behind this new “right to buy” is to help revamp high streets and end the blight of empty premises.
This aspect of the King’s Speech would appear to build on existing provisions in the Levelling-up and Regeneration Act 2023 that give local authorities the power to auction off leases of empty high-street premises (see Stop, hammer time! Levelling-up and forced rental auctions of vacant high-street premises), and the right to bid for assets of community value under the Localism Act 2011.
Planning and Infrastructure Bill
This bill is intended to speed up and streamline the planning process to accelerate house building and the delivery of major infrastructure projects.
It aims to do this in a number of ways, including by accelerating upgrades to the national grid; boosting renewable energy; simplifying the consenting process for major infrastructure projects; modernising local planning committees; and further reforming compulsory purchase compensation rules to ensure landowners receive fair compensation where land is needed for physical infrastructure and housing developments.
