The King’s Speech: three takeaways for landlords
The state opening of parliament earlier this week marked both a first and a last: the first King’s Speech in more than 70 years, and the last before the next general election. But aside from this, did the legislative agenda laid out contain anything of note for landlords?
There weren’t many surprises expected in the King’s Speech. With a general election on the horizon and constraints on parliamentary time, many speculated that it would focus on a few ‘highly political’ measures. A packed agenda in the last session also left six carry-over Bills (those that didn’t receive Royal Assent in the previous session, with the Renters (Reform) Bill being one of them), so the scope for new legislation was further limited.
Other mooted measures were omitted at the last minute, including the much-hyped (and much-derided) legislation to penalise charities providing tents to those facing homelessness. Nonetheless, with political point-scoring in mind, housing remained high on the Government’s agenda, and there were three announcements likely to interest landlords.
As anticipated, the Renters (Reform) Bill was carried over and will continue its journey through parliament over the coming months. King Charles confirmed that “renters will benefit from stronger security of tenure and better value, while landlords will benefit from reforms to provide certainty that they can regain their properties when needed.”
Next week, NRLA Chief Executive, Ben Beadle, will give evidence to the Renters (Reform) Bill Committee and set out in no uncertain terms the modifications required to ensure the Bill delivers on this pledge. These include the need for well-constructed wording of the new student ground for possession and far greater clarity on planned resourcing for the courts. The committee stage is set to conclude by 5 December and provides a critical opportunity to influence the legislation and ensure that emerging amendments are workable for landlords.
Leasehold and freehold reforms
Further housing reforms were announced in the shape of the Leasehold and Freehold Reform Bill, which is set to fulfil (in part) a manifesto commitment to deliver a more equitable housing market. However, those hoping for a radical overhaul will be disappointed, as the plans focus largely on improving redress and protections for future – rather than existing – leaseholders. More encouraging are plans to “build on” provisions within the Building Safety Act to prevent freeholders and developers from evading liability for safety failures.
However, other measures fall short of expectations, with a ban on new leasehold property set only to apply to new houses (not flats), and ground rents on existing leasehold properties to be capped at a ‘peppercorn’ rate. Given that only 6% of houses are sold as leasehold, the impact is unlikely to be as far-reaching as some might have hoped.
Lastly, the Speech contained a tantalising line alluding to changes in the welfare system. The Government confirmed it will publish proposals to reform welfare, with the aim of getting more people into work. But with no further detail to go on, one can only speculate as to whether this will seek to tackle issues with administration of Universal Credit that the NRLA continues to highlight.
In a King’s Speech that appeared to lack some ambition, none of the proposals announced address the crux of the problem – namely, the lack of housing supply. The Government can still bring forward tax and spending changes in its Autumn Statement, but any more impactful policies to alleviate housing pressures look set to be left to the next government.