Understanding the Labour Party’s Plans for the Rental Market

12th July 2024

With the Labour Party’s recent take over, we look back at their manifesto to identify the significant changes that are on the horizon. Here, we unpack the key points and what you can expect in the coming months and term of the Labour Party.

Key Outlined Changes in the Labour Party’s Rental Market Plans:

1. Abolition of Section 21 Evictions: The Labour Party plans to immediately abolish Section 21 evictions, which means landlords will no longer be able to evict tenants without a valid reason. Any new Bill will need to pass through both the Commons and Lords before receiving Royal Assent and likely only come into force after a transitional period.
2. Challenging Unreasonable Rent Increases: Tenants will gain the right to challenge unreasonable rent increases, promoting fairness and transparency in rent adjustments.
3. Ban on Bidding Wars: To prevent rental price inflation, the Labour Party aims to ban bidding wars, ensuring a more stable rental market.
4. Upfront Rent Cap: There will be a cap on the amount of rent that can be demanded upfront, alleviating financial pressures on tenants.
5. Extension of Awaab’s Law to the Private Rental Market: Originally applicable to social housing, Awaab’s Law will now cover private rentals. This law mandates:
   • Investigation of hazards within 14 days.
   • Written reports of investigations.
   • Repairs must commence within 7 days if a hazard poses a significant risk to health or safety.
   • Completion of repair work within a reasonable time period.
   • Emergency repairs to be completed within 24 hours.
   • Clear records of correspondence with residents and contractors.
6. Minimum Energy Efficiency Standards: New standards for energy efficiency in rental properties will be introduced, though details on the minimum requirements and their impact on listed properties remain unclear.
7. Removal of Gas Boiler Replacement Requirement by 2030: The Labour Party has decided not to enforce the replacement of gas boilers by 2030.
8. Stable Tax Rates: Labour has pledged not to increase the basic, higher, or additional rate of income tax. Corporation tax will remain capped at 25%, and VAT and National Insurance will stay the same. However, landlords should remain vigilant for potential increases in capital gains tax as Labour seeks alternative funding sources.
9. Housing Development Goals: The Labour Party aims to build 1.5 million new homes over five years, equating to 300,000 homes annually. This initiative addresses the UK’s low homeownership rate, with a target for 70% of households to own their own homes.
10. National Landlords Register: A public register of landlords’ properties and rents will be introduced, requiring compliance with Private Rented Sector (PRS) Decent Homes standards.

These proposed changes signify a substantial shift in the rental market landscape. As landlords, it is essential to stay informed and prepared for these developments to ensure compliance and continued success in managing your rental properties. We will update you after the budget announcement, and as legislation is introduced.