What does the King's Speech mean for me?

Leasehold reform and new rules on energy efficiency are among the Government's key priorities for the next 12 months, as laid out in the King's Speech this week. Public Affairs Officer Mia Rotaru outlines what the plans will mean for you - and how they will shape the way rented homes are owned, managed and upgraded across the sector. 

Plans to ban new leasehold flats and cap ground rents are part of a raft of proposals confirmed this week that will fundamentally reshape leasehold ownership in England and Wales. 

The King’s Speech on Wednesday also flagged the progression of the. The Energy Independence Bill – which includes the Government’s plans to introduce minimum EPC ratings in the PRS within the next four years.

So, what does all this mean in practice?

When it comes to leasehold reform the Government wants to move from a leasehold and towards commonhold system. 
Essentially this means a future where flats are owned on a freehold basis, with residents jointly responsible for managing communal areas and building costs.

What does the Commonhold and Leasehold Reform Bill promise?

Once it moves into law the Bill will: 

• Ban the use of leasehold for new flats, making commonhold the default tenure for future developments.  

• Introduce a new process to make it easier for existing leaseholders to convert buildings to commonhold.  

• Cap ground rents at £250 per year, reducing to a peppercorn after 40 years.  

• Abolish the current forfeiture regime and replace it with a fairer enforcement system that strengthens protections for leaseholders.

Haven’t we heard all this before?

Although the proposal has made headlines this week, yes, the draft Commonhold and Leasehold Reform Bill was originally published in January this year and has been on the cards since this Government came into power. 
Pre-legislative scrutiny of the draft Bill is currently underway, with ministers expected to review the Committee’s recommendations prior to formally presenting the legislation to Parliament.

When can we expect to see changes come in?

No firm timeline has been announced for the proposed ban on new leasehold flats, with Housing Minister Matthew Pennycook suggesting it is unlikely to be in place before the next General Election. Subject to parliamentary timings, the ground rent cap could come into force in late 2028.

The Energy Independence Bill

Also announced on Wednesday was the Energy Independence Bill formalising the Government’s clean energy commitments into law, something we have been reporting on for some time. 

The Bill covers landlord responsibilities, as well as household bills, home improvements and consumer protections.

How will this Bill impact me as a landlord?

The Energy Independence Bill doesn't create entirely new policies - most of these measures have already been announced - but what it will do is establish them as permanent legal obligations, making it more difficult for future governments to quietly abandon or reverse them. 

Areas impacting landlords include: 

• The introduction of a new Warm Homes Agency, responsible for delivering the £15 billion Warm Homes Plan, something you can read more about here. 

• New minimum energy efficiency standards, which will mean homes will need to have a minimum EPC C (or a valid exemption) to be legally let out. These proposals will also require landlords to pay up to £10,000 per property to fund the upgrades.

What happens next?

We will continue to keep you updated on the Bills and any related announcements as they progress through Parliament, while continuing to push for measures that are fair and workable for landlords.

More information

For more information on the NRLA's energy efficiency campaigns work click here.

Photo credit: ©House of Lords / Roger Harris