The final bills to become law are now decided. Leasehold Reform is in, Renters Reform is out. What does this mean for property owners, buyers and renters in London?
When Prime Minister Rishi Sunak unexpectedly called an election date on July 4, it gave parliament a very short window of time in which to see outstanding bills either passed into law or fail entirely. Known as ‘wash-up’, these last few days of parliamentary business saw winners and losers in the property sector.
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The Renters Reform Bill is shelved
The high-profile Renter’s Reform bill has officially failed. First published in May 2023, the bill promised the most drastic changes to the private rented sector for a generation. Most notably, it would outlaw fixed term tenancies and ban no-fault evictions. It also included a range of further measures to promote higher standards in the rental sector.
What now for rental reforms?
When a bill doesn’t make it through wash up, it fails. So, if the next administration wants to re-introduce it, they’ll have to start from scratch.
This is what happened to the Renters Reform bill. It’s now a pile of paper sitting in parliament gathering dust until a new administration picks up the baton on reforms.
So, what would a new Renters Reform bill look like? When can we expect further action on Renters Reform?
Deputy Leader and Shadow Secretary of State for State for Levelling Up, Housing and Communities Angela Rayner has previously said that a Labour government (if elected) would ban no-fault evictions on day one of a new government (I News). That statement however was made at a time when the bill was still moving through parliament and when everyone thought an election would probably not happen until Autumn 2024 (possibly as late as October) allowing time for the bill to become law.
On May 21 during a speech at UK’s Real Estate Investment and Infrastructure Forum (UKREiiF) Rayner re-iterated her party’s commitment to abolishing no-fault evictions, but made no mention of day one (Speech in Full on Housing Today). While this looks like the clearest indication of a party timeline, housing issues did not appear on Labour’s ‘big six’ policy commitments.
Looking forwards
This bill contained some important ideas for improving UK lettings, like ensuring better health and safety for tenants and promoting higher standards within the industry.
Lettings legislation is changing fast. Read what landlords are doing to keep on top of it all
A new government could, in theory, fast-track reforms by using lessons learned in this bill. A new administration could also learn from the debates that were ongoing in the House of Lords shortly before the bill fell.
Our hope is that the next government will reflect on the bill, engage with the industry and create valuable new legislation in the future.
If you need help navigating the complexities of lettings legislation to ensure your let property is always in the right, you'll want to talk to Foxtons Property Management.
Leasehold Reform becomes law
The Leasehold and Freehold Reform Act, which gained Royal Assent on May 24, will strengthen existing rights and introduce new rights for leaseholders.
What Leasehold Reform does for you
This Act should make owning leasehold property a better experience, which will open it up to more Londoners.
Also – because it’s difficult to sell a property with a short lease – measures in the Act that make it easier to extend your lease should make your Leasehold property more valuable. If you’re hoping for a better property sale under the new law, book a free valuation to see what Foxtons can do for you.
• Longer leases, more security: You can now extend your lease for 990 years (instead of 90 years for flats or 50 years for houses). This means you'll have much greater security of tenure as a homeowner.
• Easier and faster lease extensions: Thinking about extending your lease? This Act makes the process faster and more affordable. Plus, you can now extend your lease (or buy the freehold) as soon as you buy your property – no need to wait two years.
• Clearer service charges: Confused about what you’re paying for in your service charge? Bills for the upkeep of communal areas or features of a building that not everyone has or shares (e.g. balconies) are set to become more transparent and easier to understand.
• Power to make it right: Now, if you are unhappy with your freeholder, the law will make it easier to hold them accountable. You'll have a clear way to challenge poor practices and get a fair resolution. The Act also abolishes the presumption that you (the leaseholder) will foot the bill for this sort of case.
• More control over your building: You and your fellow leaseholders will have an easier time taking over management of your block or appointing a managing agent of your choosing.
The Act did not pass entirely unscathed. There has been cross-party criticism of the final bill, which might have looked different if not for the last-minute rush to get it passed during wash-up. There was, for instance, a cap on ground rents that did not make it into the law.
Labour’s Matthew Pennycook has said that the bill does not go far enough and has said that his party would abolish the leasehold system altogether, calling it “archaic and iniquitous” (BBC).
The new Leasehold Reform Act could benefit your property value – it could even make a property sale easier for you. Want to learn more? Book a free Foxtons valuation with one of our experts.
If you're searching for a home, this law could also bring more properties within reach for you. Browse our homes on the market or tell us what you're looking for if you'd like our help finding the perfect home.
Conclusion
Whichever party is announced as the winner on July 5, there is plenty of unfinished business in property law to get to grips with.
At Foxtons, we have experts in property legislation continually monitoring all the changing property legislation, to ensure our customers have the best options and opportunities available. If you have any questions, email us to ask an expert.
