Today’s King’s Speech marks the start of Keir Starmer’s new Labour government. What plans have been set in motion, and what’s in store for landlords?
Labour was clear in its plans for government as King Charles III delivered the King’s Speech, marking the opening of parliament. For Labour, “securing economic growth will be a fundamental mission,” with all of today’s announcements designed to boost opportunity and investment across the UK.
But what’s been announced for landlords? Here, we discuss the key announcements, including:
- Section 21 news
- Reforming grounds for possession
- Planning reforms to boost housebuilding
Housing and Rental Market News
In the run-up to today’s Speech, it was widely expected that housing would be a central topic for the new Labour government. However, very little was mentioned.
Labour’s plans for renters
Unsurprisingly, the government promised to introduce new legislation to give “greater rights and protection to tenants,” including scrapping Section 21 ‘no fault’ evictions. This legislation will also involve reforming grounds for possession, although, with very little detail, it’s unclear yet whether this will be fair for landlords as well as tenants.
Furthermore, Labour plans to introduce a draft legislation on Leasehold and Commonhold Reform. The Conservatives’ Leasehold Reform Bill had reached Royal Assent before Rishi Sunak called the election, so Labour is free to enact these reforms without having to go through the parliamentary process again. These include capping ground rents to £250, reducing to a peppercorn over time, and increasing minimum lease extensions for both flats and houses.
Some key omissions from today’s Speech were the rumoured plans to give tenants the right to challenge “unreasonable” rent increases, end bidding wars, and allow tenants to request to keep a pet. The devil is in the details when it comes to these types of reforms, but more will undoubtedly become clear as Labour progresses with plans to abolish Section 21.
Planning reforms to ‘Get Britain Building’
Again, today’s Speech was expected to shed some light on how Labour plans to deliver the 1.5 million new homes (a daily average of 822) promised in their election campaign. Instead, neither social nor affordable housing was mentioned.
The government promised to ‘Get Britain Building’ with planning reform to accelerate building high-quality infrastructure and housing. Devolving spatial planning powers to regional governments and metro mayors is Labour’s key strategy to deliver more homes, with planning reforms to hopefully incentivise developers.
What we need now is more clarity on these planning reforms, particularly whether Labour will reintroduce mandatory regional housing targets. This will give landlords a better idea of the new investment hotspots to focus on when planning their next property investment.
Other key announcements
The Speech covered highly anticipated topics across sectors:
- Tackle the global climate challenge with the establishment of Great British Energy and its commitment to clean energy, investing in renewable resources and lowering energy bills over time.
- Introduce new Workers’ Rights, which will ban “exploitative” use of zero-hour contracts
- Establish Great British Railways to improve local bus services and the railways. This will “enhance Britain’s position” as a leading industrial nation. Labour pledged to nationalise nearly all passenger rail services, but this will only happen once existing franchise contracts expire.
- Labour will introduce a Bill to raise education standards, break down barriers to opportunity, and remove the VAT exemption from private school fees, recruiting 6,500 new state-school teachers across England with this extra funding.
- The Government also promised to continue to support Ukraine and play its part in securing long-term peace in the Middle East. Furthermore, Labour will look to improve relations and co-operation with the EU.
- “Modernise” the asylum and immigration system. Labour also plans to make our streets safer with new legislation to strengthen community policing.
What do these announcements mean for landlords?
It’s likely that today’s announcements for the rental market may leave landlords feeling disincentivised. Abolishing Section 21 will have damaging consequences on tenants and the private rental sector if not handled correctly. It’s imperative that Labour works alongside landlords to find a reasonable solution that gives tenants more protection without revoking all rights from landlords.
We now await the more intricate details of Labour’s Renters’ Charter to give us a better idea of what’s to come for the rental market. The money markets remain stable, and today’s inflation figures show a steady 2% in June, with no movement from May. However, while SWAPs continue to ease, industry experts remain unanimous in their predictions for the first Bank of England Base Rate reduction in September rather than August.
Despite this setback in Base Rate predictions, mortgage lenders continue to soften their own pricing in line with SWAP rates. For landlords approaching their refinance plans or already on their lender’s SVR, there are plenty of competitive products on the market. It’s unlikely that a Base Rate drop, be it in August or September, will see rate pricing come down significantly, and therefore landlords who have held off until this point should now be exploring their options with a broker.
To see what types of rates you could access, get in touch with our experts on 0345 345 6788 or submit an enquiry here.
