The future of the Leasehold and Freehold Reform Bill and Renters (Reform) Bill are in doubt following Prime Minister Rishi Sunak’s announcement yesterday of a General Election on 4 July.
It unlikely that both Bills pass into law with Parliament set to dissolve on 30 May.
Speaking about the Renters Reform Bill, Glenhawk managing director of sales Jamie Pritchard says it is “incredibly frustrating for everyone involved – from landlords and property managers to tenants who are hoping for better security and standards.”
Pritchard says: “This Bill, discussed since 2019, proposes important changes like abolishing Section 21 ‘no-fault’ evictions, ending fixed term tenancies, and introducing mandatory ombudsman and landlord portal schemes.
“These changes aim to provide more security for tenants while ensuring landlords can still regain possession of their properties when necessary.”
The ongoing delays and now the potential shelving of the bill due to the election will leave the industry in limbo, according to Pritchard.
He says: “The industry needs clarity. This uncertainty makes long-term planning and investment very challenging, which is essential for a healthy rental market.”
Pritchard is also concerned about the legislation regaining momentum after the election.
He points out: “If the bill isn’t passed before the election, we might have to start the legislative process all over again, setting back reforms by years. It’s crucial that the next government, regardless of who leads, prioritises housing and the private rented sector.”
“Without these reforms, tenants will continue to face insecurity, and landlords won’t have a clear, fair framework for managing their properties.
“The abolition of Section 21 is a critical step to allow tenants to challenge poor conditions without fearing arbitrary eviction.
“Meanwhile, landlords will benefit from a stronger Section 8 process for justified evictions, such as for rent arrears and anti-social behaviour.”
The bill has been through the first and second reading in the House of Lords and is due to go to the committee stage next with a date yet to be announced.
Pritchard says regardless of the outcome of the election, the next government needs to revisit and fast-track the Renters (Reform) Bill and ensure the legislative process is transparent and includes all stakeholders to create a fair rental market.
In addition, he suggests there should be a focus on sustainable, long-term solutions for housing affordability, quality, and accessibility.
Meanwhile, speaking on the Leasehold and Freehold Reform Bill, Household managing director Linz Darlington says: “The Leasehold and Freehold Reform Bill was a Conservative manifesto promise in 2019, but their decision to de-prioritise the most important parts of their reform to the final session of parliament always carried the risk that it would not pass before the next general election.”
The bill has most recently passed the committee stage in the House of Lords.
Darlington says that he anticipated the bill would have its report stage on 5 June, allowing for ample time for both houses to agree the contents before an Autumn election.
He adds: “Clearly for it to pass now, it will have to be prioritised during any wash-up period before parliament is dissolved on 30 May – and there is no guarantee this will happen.”
“What is clear is that even if the bill is passed, it will not come into effect on a specified day. The drafting of the current bill means it is up to the Secretary of State to decide when it comes into force.”
“For this Bill to be of practical use for leaseholders, certainly from the perspective of lease extensions and freehold purchases, there is further work to be done in terms of secondary legislation before it can be implemented. It certainly won’t be the case that lease extensions will be cheaper next month than they are this month.”
“Should Sunak’s government be re-elected, then we can assume that Leasehold Reform will be picked up in the new parliament – although perhaps with less emphasis on haste than we have seen in recent months.”
“Labour’s stance on Leasehold Reform has been more aggressive in recent years: they previously promised to abolish leasehold in the first 100 days of a Labour government.
“However, in April, they u-turned on this promise, and after nearly 15 years out of power, it is highly likely that other legislation will be prioritised.”
A spokesperson for the Residential Freehold Association says that the Leasehold and Freehold Reform Bill is “a defective and poorly evidenced piece of legislation which has ignored the outcomes of consultation with industry and leaseholders alike”.
The spokesperson points out: “Pushing this Bill through without proper scrutiny will have disastrous consequences for leaseholders who will be left on the hook with rising costs.”
“Any last-minute amendment to retrospectively cap ground rents would land the next government with a £30bn compensation bill and an enormous hill to climb to repair the UKs reputation as a safe place to invest.”
