A change of Government for the UK: What does this mean for Housing and the PRS…
As we approach the dawn of a new era of governance for UK PLC, the Labour Party has laid out an ambitious manifesto and made bold statements, focused on tenancy reform, energy efficiency, building safety, housebuilding, and welfare. Labour has promised to address the systemic issues plaguing the UK’s housing market and support renters and homeowners alike. Here we look at their manifesto and the statements and pledges they have made over the weeks and months leading up to the election, for clues as to what’s in store for housing and the PRS.
Tenancy Reform
One of Labour’s flagship promises, is the immediate abolition of Section 21 evictions, commonly known as “no-fault evictions.” This reform is designed to prevent private renters from being exploited and discriminated against by landlords who can currently evict tenants without giving a reason. Labour’s commitment to abolishing Section 21, within 100 days of being elected, marks a significant shift towards securing renters’ rights.
However, while the promise to abolish Section 21 is clear, there remains uncertainty around changes and improvements to Section 8, which allows landlords to evict tenants under certain conditions. Additionally, questions remain about how the court system will be reformed to manage the expected increase in eviction cases fairly and efficiently. Addressing these aspects will be crucial to ensuring the new system works effectively for both renters and landlords.
Labour also intends to empower renters to challenge unreasonable rent increases and raise living standards decisively. This includes introducing “Awaab’s Law” to the private rental sector, which mandates strict standards for damp, mould, and other hazards. This law, named after Awaab Ishak, who tragically died due to poor living conditions in a housing association home in December 2020, will ensure that all rented properties meet high safety and habitability standards.
There has been much concern from landlords around rent controls, as some sections of the labour party have been vocal about their support for these. However, as it stands, there are currently no plans for them.
Energy Efficiency
The Labour Party has also stated its intention to prioritise energy efficiency as a key component of its housing strategy. They plan to invest £6.6 billion over the next parliament to upgrade five million homes, cutting bills and reducing carbon emissions. The “Warm Homes Plan” will offer grants and low-interest loans to support investment in insulation and other improvements, ensuring that homes are more energy-efficient without requiring anyone to “rip out their boilers.”
Additionally, Labour aims to ensure that homes in the private rented sector meet minimum energy efficiency standards by 2030. Helping reduce energy costs for tenants and contributing to broader environmental goals.
Leasehold and Building Safety
Labour’s manifesto includes a comprehensive review of leasehold arrangements to better protect leaseholders from unfair costs and accelerate building remediation efforts. The party pledges to enact Law Commission proposals on leasehold enfranchisement, right to manage, and commonhold, making commonhold the default tenure for new flats. This move will help tackle issues related to unregulated and unaffordable ground rent charges and bring an end to “fleecehold” estates.
Focusing on building safety, Labour aims to ensure that those responsible for the building safety crisis pay to rectify it, safeguarding leaseholders from bearing the brunt of remediation costs.
Housebuilding and Homelessness
Labour plans to tackle the housing shortage, by building 1.5 million new houses and by developing a new cross-government strategy, collaborating with mayors and councils to end homelessness and helping first time buyers. This includes updating the National Planning Policy Framework to restore mandatory housing targets and funding additional planning officers through an increased rate of stamp duty surcharge paid by non-UK residents and the addition of a comprehensive mortgage guarantee scheme to help first time buyers.
The party also pledges to build a new generation of new towns and prioritise the construction of new social rented homes. By reviewing right-to-buy discounts and increasing protections on newly-built social housing, Labour aims to preserve existing stock while boosting the availability of affordable homes.
Taxation, Finance, and Welfare
On the financial front, Labour intends to review Universal Credit to ensure it supports work and tackles poverty. They promise not to increase National Insurance, VAT, or any basic, higher, or additional rates of income tax. To provide stability, Labour have stated they will ensure only one major fiscal event each year, giving families and businesses ample warning of tax and spending policy changes.
A roadmap for business taxation will be published to help businesses plan confidently, with a commitment to cap corporation tax at the current level of 25%, intervening only if changes in other jurisdictions threaten UK competitiveness.
What next?
The State Opening of Parliament and The King’s speech will be on the morning of Wednesday July 17th, where the incoming government will outline its plans for its first year. We will then see what Labour housing policies will be prioritised by the new government. Press speculation is that we will see a new budget from Labour in the Spring.
To sum up – it doesn’t appear to be all doom and gloom for business and housing but we will need to keep our eyes open, especially with regard to changes to the PRS which may come in sooner rather than later.
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