A Labour Government

A new housing secretary and a new housing minister
Angela Rayner has replaced Michael Gove, having been promoted to shadow secretary in September last year. The department title has now changed, however, to Department of Housing, Communities and Local Government and her title will be Secretary of State for Housing.

Matthew Pennycook has been named as the principal housing minister, having been shadow housing minister when Labour was in opposition. We anticipate one of his early tasks being the proposition of Labour’s version of the Renters Reform Bill; expected to be included in the King’s Speech on 17^th July¹.

Rental Reform
While Angela Rayner made it clear in the run-up to the election that Section 21 evictions would be abolished ‘immediately’, it is likely that other proposals will be introduced to the Renters Reform Bill and therefore it will have to restart its parliamentary procedure, meaning it could take up to a year before the measures are enacted. Some of the other proposals include:

• The right to have pets
• A national register of landlords
• A right to request speedy repairs
• Extending Awaab’s Law to the PRS

During the passage of the Leasehold and Freehold Reform Act, Labour tabled an amendment to implement RoPA, which would suggest this will carry forward. We have supported the regulation of agents for over a decade. It is why we have opted to qualify our people in Level 3 or Level 4 award in residential letting and property management over the last 15 years.

We also wait to see how Section 8 will be amended and how capacity in the legal system will be improved to cope with the removal of Section 21. Landlords need robust grounds for possessions in legitimate circumstances, and they need the system to operate quickly when they do.

House building and planning reform
The Labour party aims to help more people to become homeowners by:

• Making use of disused ‘grey belt’ land (areas of unattractive or poor-quality green belt land).
• Hiring more than 300 new planners (funded by increasing SDLT on foreign property buyers by 1%).
• Increasing Mayoral power over planning and housing investment.
• Introducing compulsory local housing targets.
• Reforming the planning system to enable 1.5 million homes to be built in 5 years.

We can expect a draft of the National Planning Policy Framework along with a review of the green belt in the coming weeks. While a majority win may assist the government in driving through their reform proposals, a rate of building 300,000 homes per year has not been seen since the 1960s.

Permanent Mortgage Guarantee Scheme
Labour’s ‘Freedom to buy’ scheme aims to help 80k people struggling to save for large deposits to get on the housing ladder in the next five years and local people will be given priority on the sale of new developments. It is not yet clear what the specific requirements are to qualify for the mortgage guarantee scheme, and it is unlikely to address the difficulties in being able to borrow sufficient funds from lenders.

Leasehold and Freehold Reform Act
This secured Royal Assent with Labour support so can be enacted quickly. This included:

• Removal of marriage value.
• Changing standard lease extensions length to 990 years.
• Stopping houses being sold as leasehold; and
• Improving transparency of leasehold costs.

Labour aim to extend this to cap ground rents and phase out leasehold on apartments aiming to ensure commonhold becomes the default tenure. Many freeholds are owned by large pension funds and it’s not clear how Labour plan to address the issue of large investments in freeholds without disrupting the pension sector.

Energy Efficiency
Labour plan to ensure homes in the PRS meeting Minimum Energy Efficiency Standards (MEES) by 2030. Their manifesto did not state whether this means EPC C (as was the goal of the Conservative Government before the plans were scrapped in September last year).

The English Housing Survey for 2021-2022 revealed that 19% of PRS homes could cost between £10,000 and £15,000 to improve to at least an EPC rating of C, and 30% of homes could be improved for under £5,000. This high cost compared to the estimated £250 annual savings for tenants needs to be reviewed. Of course, more energy-efficient homes are a good thing for everyone, but the requirements and timelines need to be realistic. We will await detail on funding and who can access it.

Schools
The Labour Party manifesto pledged to end private schools' VAT exemption and business rate relief (introduced incrementally and rising over 5 years to 20%). This could impact the PRS by increasing demand for housing close to good state schools, which may result in premium rents being charges, or families downsizing to free up funds for schooling.

We hope that the Government works with industry experts and representatives to create a PRS that works for all parties and avoids deterring landlords from investing. If changes result in more owners selling up it will – as we have witnessed – drive rents up further for the renters, they are meant to be helping.

Published 10th July