The General Election victory for the Labour Party has seen a number of proposed changes to the law – not least in the world of residential property!
Calls for reform in certain areas of residential property law have grown over the past few years, with particular support from the party for two major policies:
Previous Governments took steps towards these goalposts, with the most recent Conservative Government getting the Leasehold and Freehold Reform Act into law in its final days.
However, the current Government plans to take these reforms further. We’re taking a look at the proposals and what they might mean for tenants and landlords.
Section 21 notices
One of the those hotly debated reforms proposed by the Labour Party, the abolition of Section 21 notices – ‘no fault’ evictions – is likely to have a significant impact on both tenants and landlords.
Currently, landlords are allowed to evict tenants from a property without fault, i.e. the tenant does not need to have breached the tenancy agreement.
This can be done either during a periodic tenancy or at the end of a fixed tenancy, as long as it is done more than four months after the start of the tenancy – allowing landlords to take possession of their property when they need to.
However, new proposals would ban Section 21 notices. Landlords would need to serve a Section 8 notice with evidence that the tenancy agreement has been broken if they want to repossess their property.
Many landlords are understandably concerned by this, as it would give them less control over their property. However, tenants would be afforded increased security and stability while they are renting.
Leasehold properties
Leasehold properties have long been a subject of scrutiny from lawmakers and homeowners, because property owners may face service charges and ground rental costs, paid to the freeholder.
These costs are subject to increase and, in recent years, have gone up markedly – leaving many leaseholders struggling to sell their property or meet rising costs.
Labour’s proposals would seek to amend the Leasehold and Freehold Reform Act to ban the sale of new leasehold flats.
The current ban extends only to new leasehold houses, which are already much rarer than leasehold flats or apartments.
Proposals are welcomed by many homeowners, and many serve to stimulate the housing market for newer buyers or those looking for a smaller space as flats become available to buy without being subject to changing costs.
We understand that proposed changes will carry a range of implications for landlords, homeowners and tenants – which is why we’re here to help.
Contact our Residential Property team today to discuss your needs or access further advice.