Every year at their party conferences, the main political parties set out their proposals for the housing market. Sometimes these involve significant changes that directly affect consumers – such as the Renters (Reform) Bill, which was first proposed by the Conservatives several years ago and is now making its way through parliament – other times it’s more a case of tweaking targets and pledging to improve processes within the homebuilding industry.
So, what happened this year? Here's our round-up of the key proposals presented by the Conservatives, Labour and the Liberal Democrats at this October’s conferences and in various papers:
The Private Rented Sector (PRS)
While the details differ, all three main parties are committed to giving tenants greater security of tenure, ensuring that landlords can only evict them on specific grounds. However, with the current shortage of rented homes, in England and Wales at least, there does seem to be more of an understanding by both the Conservatives and Labour that a healthy PRS needs to work for both landlords and tenants. As such, some of the changes proposed in the Rent Reform Bill are being tempered.
The housing secretary, Michael Gove, confirmed that the Conservative party’s Renters (Reform) Bill is on track to have its second reading this autumn - which took place on 23rd October. The Bill includes banning section 21 evictions and strengthening section 8 grounds to ensure landlords can regain possession when they need to. Tenancy agreements will become periodic – i.e. there will no longer be fixed terms – with tenants able to give two months’ notice at any point. They also intend to create a new Ombudsman for the sector and a Property Portal that will effectively introduce landlord registration.
There have been two more critical changes to the Rent Reform Bill though including introducing a “ground for possession that will facilitate the yearly cycle of short-term student tenancies”. Secondly, the abolition of Section 21 will not happen until the courts have been reformed. For more details, read our separate blog, ‘20 things landlords need to know about the Renters (Reform) Bill’.
In addition to the changes to the Rent Reform Bill, the Conservatives have also stated they will “Scrap policies to force landlords to upgrade the energy efficiency of their properties, but instead continue to encourage households to do so where they can.”
Meanwhile, Labour states that they will “Fundamentally reform the private rented sector, overhauling its regulation to markedly drive up standards and conditions and provide tenants with long-term security and better rights”, reiterating its intention to introduce a ‘Renters Charter’ if elected to power. This would also ban section 21 and introduce longer notice periods for landlords and a national landlord register. In addition, the proposals include allowing tenants to keep pets and permitting them to make ‘reasonable’ alterations to their rented home. Labour have not yet made it clear whether they will reintroduce the Energy Performance Certificate (EPC) rating targets if they win the next election.
Finally, the Liberal Democrats suggest abolishing evictions unless the tenant has broken the terms of the rental agreement and introducing a national register and minimum standards for landlords. However, rather than simply move to periodic tenancies, they propose extending the default tenancy length from one to three years.
The Conservatives retained their ‘ambitions’ to build 300,000 new homes a year – however, they have struggled to meet this so far, although 2.2 million new homes have been delivered since 2010, 1 million during the current parliament. Their focus is to develop brownfield sites, i.e. land that’s previously been used, but is currently vacant or derelict.
Labour has proposed 300,000 as a target but wants to build new towns and more homes on ‘grey belt’ land. This is a new term that refers to land that could be classed as ‘green belt’ but is actually a disused car park or wasteland, rather than green fields. The Party is also keen to reinvigorate the social home sector and ensure private developers take on their responsibilities to contribute to affordable homes.
In a bold move, the Lib Dems announced an ambitious target of 380,000 new homes a year, 150,000 of which would be social homes. Longer term, their plan would be for 10 new ‘garden cities’.
The Conservatives have already made significant progress with this, via the passing of the Leasehold Reform (Ground Rent) Act 2022, which aims to ensure that leaseholders don’t pay ground rent in the future and have extended leases of up to 990 years. Already (as of 30th June last year), most new long residential leaseholdproperties in England and Wales have zero ground rent and the intention is that existing leaseholders will be able to either buy the freehold or extend their leases, with ground rent reverting to a ‘peppercorn’ rate when the current lease period expires. New houses are also expected to have to be freehold in the future, although new flats can still be built and sold under the leasehold system.
The other main parties support substantial changes to the leasehold system, with Labour offering to support the Law Commission’s key 12 leasehold reform proposals including one leasehold regime for houses and flats and ensuring leaseholders aren’t required to pay a landlord’s non-litigation costs. The Lib Dems follow a similar line with the aim of handing over more control to their owners.
Whatever happens over the next few years, three of the main parties do seem to be more-or-less aligned on housing policy. As such it seems likely that more new homes will get built – however the composition of private versus social homes may differ and both leaseholders and tenants are expected to have more rights.
Ahead of the second reading of the Renters (Reform) Bill on 23rd October, Michael Gove wrote to MPs to emphasise that the government will not move forward with abolishing section 21 until the court system and other improvements are in place.
In the letter, he specified that digitising the court process, prioritising anti-social behaviour cases, improving bailiff recruitment and retention, strengthening mediation and dispute resolution, and giving tenants better legal advice should all come ahead of implementation of other reforms proposed in the Bill.
He wrote: Together, these reforms will ensure the modern and efficient court processes needed to make the Renters (Reform) Bill a success – delivering the fairer private rented sector that landlords and tenants deserve.”
We will continue to keep you updated on the progress of the Bill.
As always, we’re here to help, so if you have any questions about housing supply and plans for the sector in your area, just get in touch with your local Reeds Rains branch.