With Labour now celebrating its landslide victory in the general election, you might be wondering how the new government and its policies will impact your property rental business. The sector has seen soaring prices as demand has increased, forcing many prospective buyers to turn to renting instead of buying as they have waited for the property market to settle and interest and mortgage rates to come down. Such price rises are likely to continue while supply remains restricted. So what is Labour planning and how will it impact you as a landlord?
Labour’s version of the Renters (Reform) Bill
One of the main impacts for landlords will be what Labour does with its version of the Renters (Reform) Bill. The bill had been a key strategy for the previous prime minister Rishi Sunak. However, at the same time the general election was announced, the bill’s 12 amendments were being presented in the House of Lords and Sunak failed to make the bill law before the dissolution of parliament.
‘Immediate’ abolition of Section 21
Rental reform is still inevitable, however, and Labour has already pledged to end no-fault evictions by abolishing Section 21of the 1988 Housing Act which enables no-fault evictions by landlords. This was also one of the biggest changes to the rental market proposed in the original bill, although it soon became apparent its timescale would slip as objections were raised.
The new Labour government has been more forthright. It has pledged to “immediately” abolish Section 21 to give renters more power against exploitation and discrimination. However, how it will manage the scrapping of Section 21 and what “immediately” means in reality, has not yet been revealed. Legislation will take time.
Raising standards
Labour has also promised a wider reform of rental standards which will include the extension of ‘Awaab’s Law’ to the private rental sector. This focuses on damp and mould in rented accommodation and requires landlords to fix such health hazards within specified timeframes in the social housing rental sector. For responsible private landlords who keep on top of maintenance and inspections, this should mean little change since you will be looking to fix such issues as a priority anyway.
Challenging unreasonable rent rises
Another pledge in the Labour manifesto was to give renters greater power to challenge unreasonable rent increases. Tenants can already do this through a tribunal, so the changes Labour has proposed here are not yet clear.
Energy efficiency improvements
Last September saw the Conservatives scrap their plans for landlords to improve the energy efficiency of their properties to EPC C by 2025 for new tenancies and from 2028 for existing tenancies. However, in their manifesto, the Liberal Democrats adopted the policy with a 2028 target.
Labour has committed to meeting minimum energy efficiency standards in the private rented sector by 2030 but has not yet clarified how. With a promise that “nobody will be forced to rip out their boiler”, landlords will be hopeful that the changes are less demanding than the Conservatives had originally planned.
The coming weeks will bring clarity to Labour’s plans but, aside from the proposed abolishment of Section 21, the other proposed policies focus on providing improved minimum standards for renters, something that responsible landlords will already be doing.
For more information on how Kings Group can assist you on your letting journey, please contact one of our branches in Essex, London or Hertfordshire today. We also offer a free and instant online valuation to give you an idea of how much your home could be worth on the current market.
