Renters' (Reform) Bill: What's next now an election's been called?

What’s happened since our article last month?

The Renters' (Reform) Bill, a significant piece of proposed legislation affecting landlords in England, has been abandoned due to the calling of a General Election on the 4^th July 2024. The Bill had undergone its First Reading on 17^th May 2023 and reached the House of Lords in May 2024. However, it did not make it onto the list for the ‘wash-up’ period, a time when key Bills are rushed through before Parliament is postponed. Consequently, the Bill will not reach the statute book, and any new government formed post-election would need to start the legislative process anew.

With the fall of the Bill, the future of the Renters' (Reform) Bill is uncertain and will depend on the outcome of the General Election. The Conservative, Labour, and Liberal Democrat parties had all committed to abolishing Section 21, which allows landlords to evict tenants without a fault. However, the specifics of their commitments vary, with the Conservatives focusing on court reforms to strengthen grounds for eviction in cases of anti-social behaviour, and Labour and the Liberal Democrats promising immediate bans on no-fault evictions.

What are the headlines of the party manifestos?

The Conservative Party promises to pass a Renters' (Reform) Bill that will abolish Section 21 and strengthen eviction grounds for anti-social behaviour. They will introduce a two-year temporary Capital Gains Tax relief for landlords who sell to their existing tenant, and they also will continue with reforms to leasehold, including capping ground rents and making it easier to take up commonhold.

Labour's manifesto includes the immediate abolition of Section 21, measures to empower renters to challenge rent increases, and steps to raise housing standards, including extending 'Awaab’s Law' to the private sector. They also commit to ensuring private rented sector homes meet minimum energy efficiency standards by 2030.

The Liberal Democrats propose an immediate ban on no-fault evictions, making three-year tenancies the default, and creating a national register of licensed landlords. They also plan to abolish residential leaseholds and cap ground rents.

The Green Party advocates for rent controls, a new stable rental tenancy to replace no-fault evictions and energy efficiency improvements. They also propose private residential tenancy boards for dispute resolution.

Reform UK's housing policy is to scrap the 2019 Tax Changes for Landlords, abolish the Renters’ (Reform) Bill, and reform social housing law to prioritise local people.

What could the Renters' (Reform) Bill's future look like?

No matter what your political persuasion is, it is likely, at least on current polling, that the Labour Party will form the next government, with that in mind it is worth noting that Labour’s plan to immediately abolish Section 21 comes with some challenges, unless they pick up the same version of the Renters' (Reform) Bill and rush it through Parliament, which is highly unlikely. The existing bill text could be used but it will have to go through all its Parliamentary states again, from scratch, which takes time. In addition, it is doubtful that Labour would want to use the existing text as they would want to incorporate new ideas within the Bill which needs drafting time and, realistically, it's likely a consultation would be desirable first.

Furthermore, the timing of the election leans against much happening in Parliament initially, with summer recess and party conference season immediately after the election, any new administration needs some time to understand the situation they find themselves in, especially if they have been out of power for over ten years.

The other key point to remember is that the House of Lords is controlled by the Conservatives. An outgoing Conservative administration is likely to seek to cement that control. While the Lords cannot legitimately block a manifesto commitment, they can delay one. Given that Conservative peers were willing to delay a Bill promoted by their own party, it's quite possible they will do similar to a Labour administration. So, a new Labour government will have to compromise to some extent to get their legislative programme moving, they are also likely to focus on building social housing and other house-building stimuli, some of which can be done without legislation.

In summary, the General Election has created a period of uncertainty for landlords and tenants alike, with the Renters' (Reform) Bill stopped, the content of a new version hangs in the balance. The political parties have outlined their positions in their manifestos, with commitments ranging from abolishing Section 21 to improving energy efficiency and housing standards. The direction of housing policy will be significantly influenced by the election results and the composition of the new government.