What the King’s Speech means for renters, first-time buyers and leaseholders
Extract from todays article in the i newspaper
ANALYSIS
Inflation may now be down at 2 per cent, but house prices remain at near-historic highs
Britain’s new Labour Government has put the housing crisis at the top of the agenda in today’s King’s Speech as they outlined the legislation they intend to pass over the next parliamentary session.
In his introduction, Sir Keir Starmer lamented that “too many people currently live with the threat of insecurity and injustice” and said that Labour would “make sure everyone can grow up in the secure house they deserve”.
How do they plan to achieve this? Given that the last 14 years of Conservative government played out against a backdrop of rising homelessness, rising house prices, rising private rents and growing problems with affordability, it will be no mean feat.
Inflation may now be down at 2 per cent but house prices remain at near-historic highs, average mortgage rates are double what they were before the pandemic and private rents increased by an average of 8.6 per cent across the UK over the last year.
Labour’s solution to this seemingly intractable mess takes a 360 approach to the housing market. Their proposals address the leasehold/freehold system, private renting and, crucially, Britain’s sclerotic planning system which, the Prime Minister’s team hopes, will increase the supply of new housing by 1.5 million homes over the next five years.
The burning question is, how many of them will be affordable?
It is time to get familiar with planning reform if you aren’t already. Whether you’re a long-term private renter, a homeowner looking to move or a hopeful first-time buyer, today’s announcements will impact you.
Private renting
More than 11 million people rely on a private landlord to provide them with a home. That’s greater than the number of people who live in social housing.
In 2019, the Conservatives pledged to end Section 21 “no fault” evictions and reform private renting to “rebalance” the power between renters and landlords. That promise was broken when the former prime minister called a general election, and the Renters’ Reform Bill which would have delivered it was tossed aside after being delayed for months due to arguments with pro-landlord backbenchers.
Today Labour announced that the Renters’ Reform Bill will be renamed the Renters’ Rights Bill. It will be brought forward so that changes can be made to protect private renters from eviction quickly. It will also apply the Decent Homes Standard to privately rented homes in a bid to drive up standards and do away with damp, mouldy housing and seek to make it easier for renters to resolve disputes with their landlords.
Ben Twomey, the chief executive of Generation Rent – a group that advocates for private renters – told i that the return of Renters’ Rights was welcome.
However, he noted that the reforms need to go even further. Particularly when it comes to rent inflation.
“Similarly, empowering tenants to challenge rent increases won’t work if we still end up with rents rising faster than our incomes,” Twomey said.
The Government currently has no plans to regulate or stabilise rents to stop them rising. For instance, by capping how much landlords can charge.
However, regional mayors such as Sadiq Khan in London and Andy Burnham in Greater Manchester have openly called for the power to do this. Today, Labour announced the English Devolution Bill which will give combined authorities, like the one Burnham heads up, more power. Whether that could include rent regulation remains to be seen.
Last week, Burnham told i of his plans to make private renting safer and fairer in Greater Manchester and appeared to signal that he wanted to take action on rents.
Twomey added that the English Devolution Bill could be “an opportunity to give metro mayors powers to slam the brakes on soaring rents, and allow breathing space for those areas hardest hit by the renting crisis”.
The National Residential Landlords’ Association (NRLA) also appeared to welcome the Renters’ Rights Bill and said they “will work constructively with the Government as it continues to work on the detail of its plans”.