How has the last 14 years under the Conservatives affected landlords?
Now that the General Election has been announced, we thought it would be useful to take a look at the Conservatives’ various policies that have affected landlords since they took power in 2010.
With devolved governments in Scotland (SNP) and Wales (Labour), we’re focusing here on policies in England.
What's been good
Build to Rent (B2R)
These are properties – generally large-scale apartment blocks with on-site facilities - that are built specifically with private renters in mind. The concept was launched by the government in 2012, with a £1bn fund to attract investment into the private rental sector from large institutions, and it has been a great success. According to the British Property Federation, as at Q1 2024, 208 local authorities now have Build to Rent in their pipeline, with the number of B2R homes receiving detailed planning permission being the highest on record.
Passing of Leasehold and Freehold Reform Bill
Introduced to Parliament towards the end of November 2023 last year, this Bill has just passed through the House of Lords. For landlords who own a leasehold property, this Bill enables leaseholders to extend leases to up to 990 years, abolish marriage value and also limit ground rent. These changes will make it cheaper and easier for leaseholders to extend leases or buy the freehold or share of the freehold.
While the passing of this Bill is good news, it still does not address several important things that the Government had promised, including the removal or capping of ground rent for existing leaseholders.
What hasn't worked so well
Renters (Reform) Bill shelved
Given that it had reached the 2nd reading stage in the House of Lords, we and most others in the industry believed that this Bill would pass before the General Election. But with the short run-up to 4th July, the government decided it was one of the bills that had to be abandoned. However, given that all the major parties have said they are in favour of scrapping section 21, the Bill is likely to be resurrected, whoever gets into power.
Plans to raise the minimum EPC rating to C scrapped
For a number of years, this was set to become law, with a bill making its way through Parliament that proposed an effective date of 31st December 2025 for new tenancies and from 31st December 2028 for existing tenancies. Even though most in the industry thought it unlikely that changes would go ahead in 2025, we did expect a minimum C rating to come into force before 2030, given the Government’s commitment to ‘net zero’. Although Rishi Sunak announced the plans had been scrapped in September 2023, we believe there is a strong likelihood that a new minimum rating will be proposed by the next government.
Shortfall in social housing at its highest for a decade
As at March last year, there were 1.29 million households in England on local authority waiting lists. Many of these tenants on local housing allowance (LHA) are living in the private rented sector. The the fact that the Government also capped LHA and then froze it, as well as increases in inflation for the last four years, has made it even harder for social tenants to afford the private rental sector and discouraged landlords from letting to them.
Politicians of all parties seem to be oblivious of the role that the private rented sector plays in providing housing for those who may be homeless due to a lack of social housing – a deficit which is growing by the day. A change in focus from penalising 'rogue landlords' to encouraging the many fair and honest landlords is much needed.
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