What's happening with letting legislation?
Posted June 11th 2024
The landscape of letting legislation is currently undergoing significant transformation, with two major bills at the forefront: the Leasehold Reform Act and the Renters Reform Bill. As Parliament gears up for the general election, landlords are left to ponder the future of these vital pieces of legislation. In this blog post we will run through the current state and potential impacts of both bills, providing landlords with the information they need to navigate the shifting regulatory environment.
The Leasehold and Freehold Reform Bill
Has the Leasehold Reform Bill passed through Parliament?
The Leasehold and Freehold Reform Bill was successfully passed into law on the final day before Parliament adjourned for the general election. This marks a significant milestone in property legislation, especially for leaseholders.
What will the Leasehold Reform Bill do?
The Leasehold Reform Bill aims to rectify long-standing issues associated with leasehold properties. Some key changes include:
Banning the sale of new leasehold houses
One of the most impactful changes is the ban on the sale of new leasehold houses. Except in exceptional circumstances, every new house in England and Wales will now be freehold from the outset. This move is designed to eliminate the complexities and financial burdens often associated with leasehold ownership.
Easier lease extensions and freehold purchases
The bill makes it significantly easier for leaseholders to extend their leases or purchase the freehold. Standard lease extensions will now be set at 990 years, reducing the need for repeated extensions.
Setting maximum time limits and fees
The bill also introduces maximum time limits for providing home buying and selling information, along with a cap on the fees charged for providing this information. This aims to streamline the process and make it more transparent and affordable.
The Renters Reform Bill
What is the Renters Reform Bill?
First outlined in a white paper published in 2022, the Renters Reform Bill was envisioned as a comprehensive overhaul of the lettings market, aimed at strengthening tenants' rights. Key proposed changes included:
- Scrapping Section 21 No-Fault Evictions: This change would eliminate no-fault evictions, providing tenants with greater security.
- Reinforcing Section 8 Notices: The bill aimed to reinforce Section 8 notices to ensure that landlords have fair grounds for eviction.
- Tenants' Right to Have Pets: The bill also proposed giving tenants more rights to keep pets in their rented homes.
What is happening with the Renters Reform Bill?
Despite years of anticipation and numerous reassurances from the government, the Renters Reform Bill did not pass through Parliament before it adjourned for the general election. Prolonged debates and disputes over the Bill's content ultimately delayed its passage.
What will happen with the Renters Reform Bill now?
The future of the Renters Reform Bill remains uncertain and largely hinges on the outcome of the general election. Both major parties have expressed a commitment to enacting the Bill, but its prioritization may vary depending on the political landscape.
What does this mean for landlords?
Leasehold reform: Opportunities and challenges
For landlords, the Leasehold Reform Bill presents both opportunities and challenges. The ban on new leasehold houses simplifies property transactions and eliminates potential leasehold-related complications for new investments. However, existing leasehold properties may require careful management to adapt to the new rules regarding lease extensions and freehold purchases.
Renters reform: Preparing for change
Though the Renters Reform Bill has not yet become law, landlords should prepare for its eventual implementation. Understanding the proposed changes will be crucial for adapting business practices and ensuring compliance when the bill ultimately passes. Key areas of focus should include revising eviction processes and policies regarding pet ownership in rental properties.
Helping you through legislation change is one of the things we offer as part of our Fully Managed landlord service. Get in contact with our Property Management team to find out more.
The information contained within was correct at the time of publication but is subject to change.
