The King’s Speech: What Might It Mean for Housing?
The King’s Speech outlined the legislation that the new Labour government intends to bring forward in the next session of parliament. In this post we will look more closely at the housing-related proposals and at what they might mean for everyone involved.
Some initial thoughts
The King’s Speech didn’t really deliver any major (nor particularly nasty) surprises for what the new government might mean for the sector. Labour have been making their intentions clear for many months now. The King’s Speech (and the briefing document which was issued afterwards and on which this post is based) added a little more meat to what was already known.
What might have come as a bit of a surprise to some was how similar some of Labour’s proposals are to those which the Conservative government planned but didn’t manage to implement.
A closer look at the proposed new laws
Renters’ Rights
This is the big one for anyone involved with the PRS. The new government intend to bring forward a Renters’ Rights Bill.
It’s worth remembering that Labour broadly supported the now defunct Renters (Reform) Bill while saying that it didn’t go far enough. At this stage the proposed Renters’ Rights Bill has some uncanny similarities to the Renters (Reform) Bill. It does not appear to go much further. (But there is still time for that to change!)
The briefing starts from the standpoint that renting privately is fundamentally insecure. It says that what it calls a ‘significant minority’ of tenants have to put up with substandard accommodation but are afraid to complain in case they are evicted. The briefing says: ‘We will introduce tough new protections for renters, end no fault evictions and raise standards to make sure homes are safe for people to live in.’ Measures specifically mentioned include reforming grounds for possession.
Very interestingly the briefing says that the new government values the contribution of responsible landlords – something which the previous government seemed reluctant to acknowledge. It says that the government wish to level the landlord-tenant ‘playing field’. It specifically points out that the aim of the proposed new legislation is ’cracking down on the minority of unscrupulous landlords who exploit, mistreat or discriminate against tenants with bad practices.’ Hopefully this also promotes an ethos that not all landlords are bad.
It is important to note that most of these proposals, should they become law, will only change the law in England and Wales – and only apply in practice in England.
Here are the main renters’ rights proposals outlined in the briefing to the King’s Speech:
‘Abolishing Section 21 ‘no fault evictions’, removing the threat of arbitrary evictions and increasing tenant security and stability. New clear and expanded possession grounds will be introduced so landlords can reclaim their properties when they need to.’
This seems very similar to what was proposed under the Renters (Reform) Bill. Despite a Labour promise in 2023 to abolish Section 21 on their first day in office this is clearly not as easy as it might have seemed, and may take some time to effect.
The King’s Speech briefing does not suggest replacing Section 21 with a strengthened Section 8 procedure – although many people will suspect this is what is likely to be proposed sooner or later.
Creating a new evictions procedure and a legal system to cope with operating it is likely to prove a tricky nut to crack.
Very interestingly the King’s Speech briefing says nothing about abolishing assured shorthold tenancies – something which was a key part of the Renters (Reform) Bill. Many people will wonder whether this omission is a deliberate one.
‘Strengthening tenants’ rights and protections, for example we will empower tenants to challenge rent increases designed to force them out by the backdoor and introduce new laws to end the practice of rental bidding wars by landlords and letting agents.’
A system for challenging rent increases was proposed in the Renters (Reform) Bill anyway. Measures to control so-called ‘rental bidding wars’ are really a symptom of the current shortage of rental property …. and probably wouldn’t be an issue at all if there was an adequate supply of rental homes.
‘Giving tenants the right to request a pet, which landlords must consider and cannot unreasonably refuse. Landlords will be able to request insurance to cover potential damage from pets if needed.’
Again this seems a carry-over from the Renters (Reform) Bill. In the scheme of things it is a minor issue for landlords to contend with.
‘Applying a Decent Homes Standard to the private rented sector to ensure homes are safe, secure and hazard free – tackling the blight of poor-quality homes.’
The Decent Homes Standard has applied to the social housing sector since the mid 2000s, but has often proved problematic both for social providers to maintain and to enforce. A review of the Decent Homes Standard was launched in 2020. A consultation on applying it to the PRS was launched in 2022. Since then little progress seems to have been made. So, confirming a new standard and implementing it could prove to be a very tricky and lengthy process indeed.
‘Applying ‘Awaab’s Law’ to the sector, setting clear legal expectations about the timeframes within which landlords in the private rented sector must make homes safe where they contain serious hazards.’
Awaab’s Law requires social providers to deal with damp and mould issues in a timely way. It is so new that is largely untried and untested – and many social providers’ track record in dealing with damp and mould is not very good.
As with the new Decent Homes Standard good PRS landlords are unlikely to object to meeting good standards of provision in principle. But currently it is very unclear what these standards will be. To say nothing of how they will be enforced, especially given local authorities’ limited resources to enforce existing laws.
‘Creating a digital private rented sector database to bring together key information for landlords, tenants, and councils. Tenants will be able to access information to inform choices when entering new tenancies. Landlords will be able to quickly understand their obligations and demonstrate compliance, providing certainty for tenants and landlords alike. Councils will be able to use the database to target enforcement where it is needed most.’
Again the Renters (Reform) Bill proposed similar measures. Key questions to resolve will likely be how these will work with/replace existing licensing schemes like HMO and selective licensing, as well as what costs might be involved.
‘Supporting quicker, cheaper resolution when there are disputes – preventing them escalating to costly court proceedings – with a new ombudsman service for the private rented sector that will provide fair, impartial and binding resolution, to both landlords and tenants and reducing the need to go to court.’
Most PRS landlords would probably welcome a dispute resolution system that is ‘quick’ and ‘cheap’ …. very much the antithesis of what happens now. This is likely to be a tall order to achieve though. It will be very interesting to see what will be proposed …. and how ‘quick’ and ‘cheap’ it will be.
Making it illegal for landlords to discriminate against tenants in receipt of benefits or with children when choosing to let their property – so no family is discriminated against and denied a home when they need it.’
Key issues here will be how discrimination is defined and how the new arrangements are enforced.
‘Strengthening local councils’ enforcement powers. New investigatory powers will make it easier for councils to identify and fine unscrupulous landlords and drive bad actors out of the sector.’
It’s difficult to forecast how this might affect the PRS without more detail but it could potentially mean big changes. But it’s also very important to note that most local authorities already find enforcement a challenge due to limited financial and human resources.
Now let’s move on and briefly look at some of the other proposals in the King’s Speech which might indirectly affect the sector.
Planning and building
The King’s Speech proposes a Planning and Infrastructure Bill. This is intended to facilitate what is called more high quality infrastructure and more housing. The speech suggests the Bill will ‘modernise planning committees’, increase the capacity of local authorities to deal with planning and reform compulsory purchase powers.
Although Labour committed to building 1.5m homes over five years in their manifesto the Speech did not make a firm commitment to this, nor was a policy to reintroduce housing targets elaborated on. They also said that new housing will be of a variety of tenures and that affordable and social housing will be priorities, although the speech did not give specific numbers.
English devolution
The King’s Speech proposes a new English Devolution Bill. This will give powers over strategic planning, local transport networks, skills and employment support to more areas. They will be able to request additional powers. (Housing and planning is already a power of most devolved administrations.)
Although this Bill has many more non-housing implications one implication for housing is that more areas could have spatial planning powers across several local authorities. This should in theory at least make it easier to achieve housing targets.
Leasehold reform
The previous government passed The Leasehold and Freehold Reform Act 2024 just before the election. In the King’s Speech the new government has pledged to fully implement this Act and introduce a new Draft Leasehold and Commonhold Reform Bill to introduce further reforms that were not within this Act.
The speech said new measures will bolster leaseholder’s rights to extend or buy their lease and to manage their property. They will restrict the sale of new leasehold flats. They will ‘reinvigorate’ commonhold tenure, regulate ground rents, stop what is described as ‘fleecehold’ and end forfeiture of leases.
These measures will affect landlords who own or buy leasehold property.
Summary
Will these new laws happen …. and when? The new government has such a huge majority they can pretty much bring anything in.
But there are a few buts: A new Bill takes a long time to draft, debate and – even when it gets Royal Assent and becomes an Act – to phase in. A lot can change along the way.
The King’s Speech proposes 40 new Bills and represents a massive workload for both politicians and bureaucrats alike. There will no doubt have to be some kind of order of priority. You would expect that while a new Renters’ Rights Bill might not be top of the list it will not be towards the bottom either.
But get responsibility was also a pledge contained within the King’s Speech. This says a fiscal lock will be introduced to prevent uncosted measures being introduced. In theory, therefore, and as an example, if an improved court system to operate a new evictions process cannot be afforded it cannot be introduced.
So even given the new government’s majority it is not a given that these news laws will come into place anytime soon, or even at all.
A key point to bear in mind is that the laws proposed in the King’s Speech were (as is usually the case) quite light on detail. It will be very interesting to see the detail in the future new Renters’ Rights Bill, for which there is no target publication date as yet.
So far as landlords are concerned there doesn’t seem much that was proposed in the King’s Speech that hadn’t already been proposed in the defunct Renters (Reform) Bill. So, perhaps, there is not that much more to worry about than there was 12 months ago. Until the detail is announced, however, a degree of uncertainty is bound to affect the sector.
But one last, slightly cautionary, point: The reforms to the rental market proposed by Labour over the last couple of years (well before the election) were generally much more radical than those proposed in the King’s Speech. They were often not very palatable to most PRS landlords.
One thing is for sure changes are coming to the PRS. And these will affect everybody. But, for now, it is a case of ‘watch this space’.
