What do Labour’s Housing Plans mean for Private Landlords?

A Labour government is set to bring several significant changes for private landlords, aiming to create a fairer and more regulated rental market, but will this be achieved?

Many private landlords may have been relieved that the Conservatives failed to pass their Renters Reform Bill (the Bill), which was aimed at ensuring greater security for tenants. However, the final draft of the Bill did not include the abolition of Section 21 ‘No Fault’ Evictions, which was welcome news in the private rented sector.

Labour may have been content with the Bill in its final draft, but they do intend to abolish Section 21 ‘No Fault’ evictions as soon as possible. This will be of significant concern to private landlords who will no longer be able to evict tenants without providing a reason, much like the position for the social housing sector.

In reality, the Section 21 accelerated possession procedure is by no means straightforward, with many private landlords falling foul of the requirements that must be fulfilled in order to serve a valid notice. In many cases, private landlords are opting instead to rely one of the grounds in Schedule 2 of the Housing Act 1988 (as amended) to recover their properties.

Private landlords will be relieved to hear that Labour does still plan to allow them to recover properties if they used to live in them and need to again, and also if they intend to sell. However, Labour wish to prevent this taking place within the first 2 years of the tenancy, rather than the 6 months proposed under the Bill and to ensure that landlords cannot re-let the property for a period of 12, rather than the 3 months also proposed by the Bill. This could cause significant hardship for a landlord facing homelessness or needing to sell urgently for financial or health reasons.

Further Labour proposals relating to rent include a right for a tenant to reclaim increased rent if the landlord did not formally give notice of the increase, restricting the tribunal from assessing the market rent at higher than that requested by the landlord and prohibiting landlords, or more likely letting agents, from inviting or encouraging bids that exceed the amount of rent advertised.

It also appears that under a Labour government that Awaab’s law, introduced under Section 24 of the Social Housing Regulation Act 2023, requiring social landlords to quickly undertake repairs and maintenance to prevent damp and mould, will be extended to the private rented sector. This, in addition to the requirement for landlords to invest in making their properties more energy-efficient, could involve significant cost for the landlord, which they may not readily have available.

Labour’s housing plans may create a fairer and more secure rental market for tenants and possibly private landlords in the long term. But in the short term they pose significant challenges for private landlords, many of whom already feel the odds are stacked against them.

Recovering possession is not easy even when using the ‘no fault’ section 21 procedure or when the tenant is in significant rent arrears. The process can be slow due to significant backlogs at the County Court and tenants are often advised by their Council to remain in occupation until facing eviction, due to a shortage of suitable housing to place them once evicted.

The Labour government does have plans aimed at addressing the chronic housing shortage which includes the construction of 1.5 million homes within the next 5 years, overhauling the planning system to make it easier to build houses on less desirable parts of the green belt and removing barriers that have slowed down development. However, these plans will take time to implement and will not alleviate the immediate problem.

The changes will also force private landlords to charge the maximum market rent to ensure they have the means to implement whatever is required of them. This has been good practice but in reality, it may hurt renters, many of whom are simply not in a position to pay the full market rent.

The path to a stable and fair rental market for the private rented sector remains far from clear, but the Housing and Regeneration Team at Bexley Beaumont are committed to assisting landlords and tenants to navigate the existing and changing housing landscape.

If you require any help, please contact Sarah Savage: sarahsavage@bexleybeaumont.com  |  07825 554148