What the Election Result Means for Housing

Now that the general election is over – and the party who most people expected to win actually won – it’s likely there will be some big changes in housing-related legislation over the next few years. In this report we will look at what the new Labour government might mean for housing, and particularly the PRS, housing compliance and enforcement.

Firstly, housing-related implications of the general election being called

The announcement of the general election in May had at least one big implication for housing. It meant that the Conservative’s Renters (Reform) Bill, into which much time and effort had been invested, didn’t make it into law. If the election had been announced just a few weeks later then, chances are, a new Renters (Reform) Act would now be law and things would look very different.

While Labour are very likely to introduce their own rental reforms (see later) all existing landlord and tenant laws remain in place for the time being.

One piece of housing-related legislation that was pushed through at the last minute was leasehold reform. Though this was to some extent a watered down version of what was planned. (Labour has pledged to widen the scope of leasehold reform.)

What part did housing play in the election campaign?

Perhaps surprisingly – bearing in mind that we have a severe housing shortage in the UK with high and increasingly unaffordable purchase prices and rents – housing wasn’t a big feature of the campaign. YouGov research put it well behind the cost of living, health, immigration and the environment in a list of voters’ main concerns.

The main parties made bold promises about building more houses and making buying and renting better, but they were mostly fairly vague with few specifics.

Labour’s housing proposals

Now that the Labour Party is in office let’s look more closely at what Labour have proposed they will do in housing. (Interestingly, and unlike other parties, Labour didn’t have a dedicated ‘housing’ chapter in their manifesto, and their proposals were distributed across several chapters.)

Labour’s plans for rental reform

The Labour manifesto made some particular promises in relation to housing. It said Labour will:

Overhaul the regulation of the private rented sector.

There was little detail on this, but there is reason to believe reforms could be pretty substantial.

Immediately abolish Section 21 ‘no fault’ evictions.

In an interview in late 2023 the then Shadow Housing Secretary Angela Rayner said Section 21 would be abolished on Labour’s first day in office and their manifesto suggests ‘immediately’. In June Keir Starmer, perhaps realising how difficult this would be to do on the first day, rowed back on this slightly but still said it would be a ‘priority’. So it is likely proposals on this will appear fairly soon.

Prevent private renters being exploited and discriminated against.

The types of exploitation and discrimination were not specified. Although it might be aimed at preventing discrimination against tenancy applications from those on benefits, tenants with children or even those with pets.

Empower tenants to challenge unreasonable rent increases.

Again further detail was not given. In May the then Shadow Chancellor Rachel Reeves made an ambiguous statement on rent controls, but it appears Labour is broadly not in favour of them. (There is also, of course, existing legislation that allows tenants to challenge rents.)

Take steps to decisively raise standards.

A little more meat on the bone was offered here with a proposal that the so-called Awaab’s Law will be extended to the private sector.

The idea of Awaab’s Law arose during the course of 2022-23 as a result of the death of two year old Awaab Ishaak in Rochdale. At the inquest the coroner attributed his death to damp and mould in his family’s social home. Awaab’s Law requires that social landlords deal with damp and mould issues in their tenant’s homes in a timely manner. It was enacted as part of the Social Housing Regulation Act which received Royal Assent last July.

It seems likely, therefore, that a similar law will be introduced into the PRS. Could this perhaps be done by making an amendment to the Housing Act 2004?

It should also be remembered that this law is still a very new proposition for the social sector and something of an unknown quantity. Damp and mould has proved to be a significant problem for many social providers, and one which many have had great difficulty in tackling. It is very unclear how it might translate to the PRS. And just as unclear how it might operate, given local authorities often find that enforcing existing housing standards is not easy.

In a separate pledge at the end of June Keir Starmer said Labour will ban so-called ‘bidding wars’ for rented accommodation. It is worth noting that situations where tenants offer to pay over the asking rent to secure a property are a relatively recent phenomenon and a symptom of the chronic shortage of property to let. They were practically unknown in times when there was a good supply of property to rent.

How might Labour’s rental reforms be implemented?

There are two ways in which Labour could reform the rental sector. They could perhaps amend existing legislation or introduce complete new Acts – or both. Given the manifesto suggests an ‘overhaul’ and not just tweaks it seems likely a whole new Act might be proposed at some stage – perhaps a Renters (Reform) Bill Mark II?

The Conservative’s Renters (Reform) Bill cannot be taken on by the new Government – even in the unlikely event they wanted to. However, many will hope that Labour might learn something from the difficulties experienced in putting together it together. For example, and to name just one, that any reformed policy on evictions needs a legal system that can handle it.

What might new rental reform laws consist of? It is really too early to say – although given their large majority they can pretty much bring in what they like. It is worth remembering that Labour broadly supported the Renters (Reform) Bill, while suggesting that it didn’t go far enough.

This spring, just before the general election was announced, a report saying it is an ‘independent review of the UK’s private rented housing sector’ was published by Labour Party-linked organisation The Private Rented Sector Commission. This contained some pretty radical proposals on rental reform. We reported on it here. Subsequently Labour appeared to distance themselves from the report, but many will wonder if any of these proposals will find their way into any new laws.

Labour’s plans to build more new homes

Some may ask how plans to build more houses impact housing legislation and housing enforcement? A sensible if simplistic view might be that more houses mean more housing problems/issues will arise, more complaints, more enforcement, a need for more resources to enforce them and more new rules and regulations.

All the main parties promised to build more houses. In Labour’s case they have pledged to build 1.5 million new homes over five years, using a variety of measures including reforming the planning system. This is an ambitious pledge. The previous government was never able to achieve a target of 300,000 new homes annually, nor has it been achieved since the 1970s.

A notable Labour pledge was to build more social and affordable homes. Prioritising the building of social rented homes and the development of new towns with 40% affordable homes are proposed. This might suggest there will be an expansion of the social rented sector. And, therefore, a need for more social housing regulation and enforcement.

Labour’s plans for energy efficiency in housing

Labour has pledged to reduce household utility bills and deliver a ‘cheaper, zero carbon electricity system’ by 2030. There are a couple of proposals here which could affect the housing sector.

They have said they will introduce what they call a Warm Homes Plan. The aim is to invest £6.6 billion to make five million homes energy efficient. This will offer grants and low interest loans to support investment in insulation and other improvements such as solar panels, batteries and low carbon heating. It will also enable banks and building societies to provide further private finance for home upgrades and low carbon heating.

They have pledged to make homes in the private rented sector meet minimum energy efficiency standards by 2030, which they claim will save renters hundreds of pounds per year. Although specific details have not been given some commentators feel this might involve tightening the minimum EPC rating for rented homes by that date. This could be to a minimum of C as proposed by the previous government, but later abandoned, and which many landlords have already been planning for. (There is, of course, already a minimum EPC rating of E or better for rented properties.)

The party have pledged that there will not be any highly controversial net zero related measures, such as a requirement to replace gas boilers.

Other Labour housing proposals

There are a couple of other Labour proposals relating to housing. The impact of these on housing regulation and enforcement is likely to be small, but they are still worth noting.

Labour has pledged to introduce a Freedom to Buy mortgage guarantee scheme, which is likely to be an extension of Help to Buy (but they say it will be permanent). This could impact the PRS by converting some renters into buyers. They have also pledged to impose 1% extra Stamp Duty on non-UK buyers over and above existing premiums, and to give local buyers priority to buy on new developments. This might dissuade some foreign buy to let investors and could affect the supply of rental property.

Summary

Although the election campaign is now over, it could be said that the ‘fun’ is only just beginning for the housing sector.

Labour is unlikely to do anything that will help or encourage the PRS. But then again nobody really expected them to. There are some pledges that could see an expansion of the social sector. It is also possible that there will need to be an expansion of the build to rent or BTR sector if 1.5 million new homes are to be built by 2029. This could have some implications for regulation and enforcement in the wider rental market.

It seems likely that the new government will almost certainly propose, and almost certainly be able to bring in, some extensive reforms of the private rented sector. So, it will likely be a case of not if but when. However, it is important to realise that whatever Labour’s intentions here it will take time – possibly considerable time – to formulate, propose, debate, introduce and implement any new laws. The now defunct Renters (Reform) Bill showed how problematic and time consuming this can be.

The King’s Speech is traditionally used by a government to announce their legislative programme for a new parliament. Currently the next King’s Speech is scheduled to be held on Wednesday 17 July. That is not much time to add more detail to Labour’s manifesto proposals. So it may be much longer, and perhaps in the autumn, before the full detail of their intentions emerges.

So, while landlords will definitely need to monitor what Labour will do, there is probably no need to make rash decisions. In the meantime the housing shortage means that there will still be high demand for landlords’ properties, and likely strong rents too.

Lastly one final point worth noting is that some housing-related powers – PRS legislation to name but one – are devolved to Scotland, Wales and Northern Ireland. So there is a curious situation where even though voters in those countries had the opportunity to vote on these issues in the general election they will not be affected by decisions made in Westminster.