28 May, 2021
The Queen's speech on May 11th outlined a number of proposals to “enhance the rights of those who rent”, to modernise the planning system and help more people to own their own homes.
We will attempt to summarise the changes and explain how they might affect you should they become legislation.
Renters Reform Bill
The government announced that it would fully outline its “reform package” for the private rented sector in the autumn - which is set to include abolishing Section 21 and the introduction of lifetime deposits.
The Government has stressed that there will be extensive stakeholder engagement to ensure that the reforms deliver a private rented sector that works for both tenants and landlords.
The key features of the Renters Reform Bill
- Reform tenancy law to abolish Section 21 ‘no fault’ evictions to improve security for tenants. If passed, landlords will need to provide their tenants with a valid reason for ending a tenancy (at the end of a contract), for example, breach of contract or wanting to sell the property. Currently landlords are not required to provide their tenants with a reason for eviction, hence the term ‘no-fault’ eviction.
- Equally, the government want to strengthen repossession grounds for landlords when they have valid cause or want to move into a property themselves. Among the ‘valid causes’ being discussed are whether a landlord should have the right to recover their home once a tenant is in arrears of two months or more.
- Proposals for a new ‘lifetime’ tenancy deposit model that eases the burden on tenants when moving from one tenancy to the next. Frequently tenants have had to source funds for a new deposit before they have had monies returned from a previous contract. This reform would allow a deposit to be transferred with every move.
- Bring forward reforms to drive improvements in standards in rented accommodation, including ensuring all tenants have a right to redress, and ensuring effective enforcement that drives out criminal landlords. Additionally, exploring the merits of a landlord register.
- This reform package is also expected to require all private landlords to belong to a redress scheme, to drive up standards in the private rented sector.
- Further reforms of the private renter sector enforcement system so it is well targeted, effective and supports improvements in property conditions. This will include a set of measures to hold bad landlords to account without penalising good landlords.
It is likely that this will take 12-18 months to become legislation, although many believe the abolition of the Section 21 notice will happen sooner.
The Leasehold Reform (Ground Rent) Bill will “prevent the practice of onerous and escalating ground rents from affecting future leaseholders.”
Ground rent charges are to be banned on new-builds in a bid to protect millions of leaseholders from eye-watering increases every single year. Under a new law confirmed in the speech, people in residential long leases will pay no ground rent, other than a fixed ‘peppercorn’ amount. Welcome news for those looking to buy a new-build property, but for now, existing leaseholders will still be liable for the costs.
Under proposals not included in the speech, millions of leaseholders could also be given the right to extend their lease by up to 990 years at zero ground rent, in a government bid to make leasehold home ownership “fairer and more secure.”
Read more about leasehold and freehold properties in our recent blog.
Helping more people own a home and planning reform
Laws to modernise the planning system so that more homes can be built are due to be brought forward. In a policy paper, the government noted the planning bill would aim to “create a simpler, faster and more modern planning system to replace the current one that dates back to 1947.” The proposed bill will also make it harder for local residents to block new housing schemes.
The government wants to correct imbalance between supply and demand and make it easier for people to get onto the property ladder. They are aiming to create 300,000 new homes annually - only 192,725 homes are being built currently.
If you are interested in finding out more about some of the changes might affect you as a landlord, tenant, home buyer or seller, please do not hesitate to contact us on Wokingham 0118 9776 776 or Crowthorne 01344 779 999.
We would be more than happy to provide you with no-obligation advice about renting or buying a property in the Wokingham or Crowthorne areas - just complete the enquiry form below and we will be in touch.