The King’s Speech and what it means for the housing sector

Renters Rights Bill

The Government has committed to introducing legislation to give greater rights and protection to those in rented accommodation in the private rented sector through the newly entitled ‘Renters’ Rights Bill’.  Whilst this may sound very similar to the Renters (Reform) Bill, which did not make the ‘wash up’, there are some notable differences.  When considering the briefing notes, this states that the Renters’ Rights Bill will:

o   Abolish section 21 ‘no fault evictions,’ removing the threat of arbitrary evictions and increasing tenant security and stability.  New clear and expanded Grounds for possession will be introduced so that landlords are able to recover possession of their properties when they need to.

o   Strengthen tenants’ rights and protections, for example, by empowering tenants to challenge rent increases.

o   Give tenants the right to request a pet, which landlords will be obliged to consider and will not be able to unreasonably refuse.

o   Apply a Decent Homes Standard to the private rented sector to ensure homes are safe, secure and hazard free.

o   Apply ‘Awaab’s Law’ to the private sector, which will set clear legal expectations about the timescales within which landlords in the private rented sector must make homes safe when a serious hazard exists.

o   Create a digital private rented sector database to bring together key information for landlords, tenants, and councils.  This will enable Tenants to access information to inform choices when entering new tenancies, and allow landlords to understand their obligations and demonstrate compliance.

o   Support quicker, cheaper resolution when there are disputes – preventing them escalating to costly court proceedings through the new ombudsman service for the private rented sector.

o   Make it illegal for landlords to discriminate against tenants in receipt of benefits or with children when choosing to let their property, ensuring that no family faces discrimination and is denied a home when they need it.

o   Strengthen local councils’ enforcement powers through the introduction of new investigatory powers which will make it easier for councils to identify and fine unscrupulous landlords.

Whilst the abolition of Section 21 makes good on a key Labour commitment, it will be imperative that any system that replaces it, by the introduction of new Grounds for possession, goes far enough in providing sufficient protection for landlords to evict tenants where needed, and a court procedure that allows cases to proceed and be progressed effectively and efficiently.

Leasehold Reform

The Government is committing to act quickly to provide homeowners with greater rights, powers and protections over their homes through the provisions of the Leasehold and Freehold Reform Act 2024.  This Act, which received Royal Assent during the ‘wash up,’ is likely to be seen as a welcome step in the sector, creating greater certainty over issues such as leasehold enfranchisement, making it easier and cheaper for leaseholders to buy their freeholds and extend their leases.

On further leasehold reform, there is also a promise to lay a ‘Draft Leasehold and Commonhold Reform Bill’ before Parliament, with the Government intending to shift towards commonhold as the main method of home ownership. Whilst commonhold was created over 20 years ago there are only around 20 commonhold buildings in existence compared with 5 million leasehold residential properties. Notably, the Leasehold and Freehold Reform Act 2024 did not contain proposals on how commonhold would be dealt with so it will be interesting to see what follows this speech.  Within the briefing document, it explains that the Government will take steps within this Draft Bill to bring the feudal system of leasehold to an end and reinvigorate commonhold by:

-          Enacting remaining Law Commission recommendations to bolster leaseholders’ fundamental rights, allowing leaseholders to extend their lease and buy their freehold, and take over the freeholders building management functions.

-          Reinvigorating commonhold by modernising the legal framework.  This will include, for example, the restriction of the sale of new leasehold flats.

-          Tackling existing ground rents by regulating ground rents for existing leaseholders so they no longer face unregulated and unaffordable costs.

-          Bringing the injustice of ‘fleecehold’ private estates and unfair costs to an end – following consultation by the Government, this will be implemented in the Leasehold and Freehold Reform Act 2024.

-          Ending the injustice of forfeiture so that leaseholders are protected against losing savings they have in their home over potentially small unpaid debts

Given the extent of the proposed reforms, it remains to be seen when this Bill will be introduced and again, being able to see the full extent of the proposals in a draft Bill will be of notable assistance to the sector especially given that it is not currently clear how the Government intends to deal with commonhold; whether they plan to cap ground rents as proposed by the previous Government or how they are proposing to regulate existing ground rents. Similarly, it is not clear how forfeiture is to be restricted or if landlords will be required to account for any surplus. As always, the devil is in the detail and once a copy of the draft Bill is available more will become clear, but what has become clear so far is that this current Government plans to go further on reform then the previous Conservative Government.

Anti-Social Behaviour

Though the Crime and Policing Bill, the Government intends to deliver on their promise to ‘take back our streets’, which will include granting the Police the powers that they need to ‘crack down’ on crime and anti-social behaviour.

Within the briefing to the Speech, of particular interest to the social housing sector within the Crime and Policing Bill is likely to be the proposals to:

-          Rebuild neighbourhood policing by bringing forward arrangements to get neighbourhood police and PCSOs ‘back on the beat’ in local communities; and

-          A crackdown on anti-social behaviour through the introduction of new ‘Respect Orders’ to tackle persistent adult offenders, fast-track Public Spaces Protection Orders to make it quicker and easier to clamp down on rapid escalations in street drinking, and introduce new powers to tackle the dangerous and anti-social use of off-road bikes. There is also an intention to create a duty for local partners to co-operate to tackle anti-social behaviour, with an anti-social behaviour lead in every local authority area.

The plan to rebuild neighbourhood policing is likely to be welcomed by many RPs and communities alike, particularly as, during recent discussions with clients, they have reported a distinct lack of police presence in their estates and communities which has had a notable impact on the escalation of anti-social behaviour in certain areas.

With regards to Respect Orders, it isn’t clear at the moment as to who will be able to apply for these.  However, we would suggest that consideration sector-wide is going to be necessary if this is going to work.

Getting Britain building

Through the Planning and Infrastructure Bill, the Government seeks to unlock more housing and infrastructure across the country and support sustained economic growth.

The Bill will accelerate housebuilding and infrastructure delivery in alignment with the Government’s industrial, energy, and transport strategies.  Interestingly, however, there was no mention of Labour’s plan to build 1.5 million homes over the next 5 years, which, as one sector professional has commented, may suggest that the Government will take a pragmatic approach to affordable housing supply.

Within the briefing to the Speech, it explains that the Planning and Infrastructure Bill will:

-          Streamline the delivery process for critical infrastructure including accelerating upgrades to the national grid and boosting renewable energy, benefitting local communities, unlock delivery of the Government’s 2030 clean power mission and net zero obligations, and secure domestic energy security ending the ban on new onshore wind in England and ensuring that decisions on large developments are taken nationally not locally.

-          Further reforming compulsory purchase compensation rules, ensuring that compensation paid to landowners is fair, but not excessive, where, for example, affordable housing is being delivered. Key to this could be the abolition the “hope value” ensuring that landowners are compensated by what is on their land rather than what could be built on there.  The Government has stated that this reform will unlock more sites for development, enabling more effective land assembly and in so doing, speed up housebuilding and delivery of more affordable housing.

-          Improving local planning decision making by modernising planning committees and putting growth at the centre of the planning system and restoring mandatory housing targets for councils with ministers not hesitating to intervene and review an application with a potential gain for the regional and national economies.

-          Increasing local planning authorities’ capacity, by appointing an additional 300 planning officers across the country funded by a 1% stamp duty rise for overseas buyers of UK property to help improve performance and decision making, providing a more predictable service to developers and investors.

-          Using development to fund nature recovery where currently both are stalled, unlocking a ‘win-win’ outcome for the economy and for nature.

-          Accelerate Stalled Housing Sites by creating a taskforce who will specifically look at said sites starting with 4 particular developments which together represent more than 14,000 homes.

-          Grey Belt Areas there will be a review of green belt areas with some of the land to be designated grey belt, unattractive areas where development is currently banned but may not be so in the future. The Government has stated they will be writing to local councils to advise that their local plans will need to prioritise using brownfield and grey belt land for development.

It is notable from the Speech that there is a distinct lack of clarity regarding any funding that the Government will provide to RPs to deliver the much-needed increase in affordable homes. As such if the Government are to hit their previously proposed target of 1.5 million new homes it seems that this will have to be dealt with by public and private partnerships, most likely between local authorities and other state bodies working together with private sector developers.

By streamlining the planning process, reforming compensation rules and unlocking development sites the Government is clearly aiming to accelerate construction and make housing more affordable. As the Bill progresses there will undoubtedly be debates over how to best balance development with environmental and local community concerns and it will be interesting to see how this develops.