Introduction
The Labour Party is in government for the first time in 14 years and is determined to make a change regarding British politics. One of their major plans for the country is housing reform. All eyes are on the Labour government to see how they plan on dealing with the ongoing housing crisis. So, let’s discuss their plans.
What are the current issues they have to deal with?
Rising Costs:
Over the last couple of years, the cost of houses has significantly increased, with mortgage costs at their highest and significant tax changes meaning many landlords have seen a reduction in returns.
Rental Housing Supply: Additionally, there has been a major disproportion in rental supply and demand, resulting in rising, unsustainable rent prices all across the country.
Rental Reforms: As a result, the Labour government has drafted plans to resolve these ongoing problems. Some of the reforms that will be discussed include scrapping Section 21 evictions, banning the sale of leasehold flats, warm house plans, and building new homes and towns.
Energy Efficiency: In addition to these plans, the Labour government plans to introduce scrapped plans regarding increasing minimum energy efficiency standards in rental properties.
Labour Rent Reform:
Abolishing Section 21: One of the Labour government’s prominent agendas is to abolish Section 21. A Section 21 notice is a legal document used by landlords in England and Wales to evict tenants without giving a valid reason. It’s also known as a “no-fault” eviction. It involves a 2-month written notice issued after the initial fixed term of an assured shorthold tenancy or during a periodic tenancy.
The Labour Party’s manifesto promises to, “immediately abolish Section 21 ‘no-fault evictions to prevent private renters from being exploited and discriminated against.”
The Labour Party plans to reintroduce the bill after the Conservatives scrapped it due to the need for court reforms before such a change can be enforced. The party has pledged to scrap Section 21 evictions immediately, informing landlords to prepare for the details of how it will work soon.
Ending the Sale of Leasehold Flats: Labour will ban the sale of leasehold flats and attempt to replace them with a commonhold system, abolishing the system that allows a person to live in a home for a set number of years as stated in a lease without owning the building or land. This will be implemented through the Leasehold and Freehold Reform Act 2024. It is set to establish a framework that tackles “unregulated and unaffordable ground rents” and the “disproportionate and draconian threat of repossessions as a means to ensure payment.” Additionally, selling all new leasehold flats will be outlawed to allow commonholds to become the norm.
Driving up Standards: The Labour Party plans to raise standards within private rented homes by extending Awaab’s Law to the private rental sector. This will address health and safety hazards such as damp and mold, excess cold or heat, and carbon monoxide and fuel combustion products.
Currently, the law requires social housing landlords to:
- Investigate hazards within 14 calendar days
- Provide a written report of the investigation
- Begin repairs within 7 calendar days if the hazard could create a significant risk to the health and safety of residents
- Complete repair work within a reasonable time frame
- Complete emergency repairs within 24 hours
The Labour government has made provisions to extend these standards to private rented homes.
Warm Homes Plan: Additionally, the government has committed to meeting the minimum energy efficiency standards by 2030. The Labour Party’s Warm Homes Plan will invest an extra £6.6 billion over the next parliament. This investment will upgrade 5 million homes to lower bills for families.
New Homes and Towns Built: In their manifesto, Labour committed to “get Britain building again” with 1.5 million new homes over the next parliament. First, they plan to immediately update the National Policy Planning Framework to encourage sustainable development and create new homes to support the increased demand for housing.
Conclusion
The Labour Party has a comprehensive plan in place to reform the UK housing crisis. So let’s wait to see how the Labour government plays it all out.
https://www.perrybishop.co.uk/what-does-a-labour-government-mean-for-landlords-the-rental-market
