A year of Labour has passed - what's changed in property?

After 14 years of the Conservatives being in power, Labour finally took over the reins in July 2024, promising to be much more focused on ramping up the supply of affordable new homes, giving tenants more rights and doubling down on its commitment to Net Zero.

When Parliament was dissolved ahead of the election, there were two significant pieces of housing legislation underway that still needed more work: the Renters (Reform) Bill and the Leasehold and Freehold Reform Act. At the time, Labour told us they would:

• Deliver “a blitz of planning reform to quickly boost housebuilding to buy and rent and deliver the biggest boost to affordable housing in a generation”
• Scrap the Renters (Reform) Bill and replace it with their own version – with Angela Raynor quoted as saying Labour would “ban ‘no-fault’ evictions with no caveats on its first day in power”.
• Abolish leasehold and replace it with commonhold – although not within the first 100 days.
• Uphold the Tory housebuilding target of 300,000 new homes a year, committing to 1.5m within their first 5 years.
• Build the next generation of ‘new towns’ with 40% of the stock affordable housing.
• Introduce a Warm Homes Plan to cut household bills by up to £500 a year and give local councils the power and funding to upgrade homes.

So, one year on, how much progress have they made?

Planning reforms

On 11^th March, Labour’s Planning and Infrastructure Bill was introduced in Parliament, and it has now reached the Committee Stage in the House of Lords.

Rental reform (England only)

This is one area of housing policy they have moved quickly on, as promised. The Renters’ Rights Bill (RRB) was introduced to Parliament and had its first reading on 11^th September 2024. While many of the measures were very similar to those in the previous Conservative Bill, the RRB does go further towards favouring tenants’ rights. The Bill is currently at the 3^rd Reading stage in the House of Lords, with only two more stages to go – final consideration in the Commons and Royal Assent.

While we await the passing of the Bill, there are three key things to note:

• Although Labour promised to scrap Section 21 as soon as possible, this hasn’t happened yet.
• While various amendments have been made throughout the progress of the Bill, two of the most significant for landlords be aware of are:
  • Landlords won’t be able to require tenants with pets to get pet damage insurance or pay towards a landlord’s policy. In the original version of the Bill, this was to become a permitted payment under the Tenant Fees Act.
  • If tenants unsuccessfully challenge a rent increase, the First Tier Tribunal will be able to backdate it to the landlord’s original Section 13 notice. In previous versions of the Bill, the ability to backdate the increase had been removed, so this is good news for landlords!
• Plans to extend the Decent Homes Standard to the PRS are well underway – a review of the current version has been completed and a consultation has been launched into the Government’s proposed changes.
  
  

Leasehold reforms

At the end of January, the first of the measures in the Leasehold and Freehold Reform Act, which was passed under the Conservative Government in May last year, was enacted. This was Section 27, which removes the two-year ownership rule, meaning that leaseholders can now extend their lease or buy the freehold once they’ve purchased a leasehold property without having to wait two years.

The second change came into force on 3^rd March, giving more leaseholders of flats the right to manage the property themselves. Leaseholders simply need to set up their own management company and serve formal notice on their landlord/freeholder – there’s no need to seek permission. After a set period of time, the management transfers, and there’s no longer any requirement for leaseholders to cover the freeholder’s legal fees.

The Government has also now launched its White Paper on a new Commonhold model, with plans to introduce a Bill later in the year.

New housebuilding

According to analysis by BBC Verify, every region of England had a year-on-year fall in new homes in the first six months of Labour being in power, with around 107 new homes recorded in the second half of 2024, a drop of 10% on the same period in 2023. With an annual target of 300,000, this puts Labour well behind.

However, in a positive step, the Government recently announced a new £39bn Social and Affordable Homes Programme, as part of their wider Plan for Change. 60% of the homes will be for social rent, with 40% available for other tenures including shared ownership and affordable rent. This is the biggest boost to grant funding in a generation.

New permanent Mortgage Guarantee Scheme announced

At the end of June, the previous government-backed mortgage guarantee scheme ended. However, Labour has announced a new version of the scheme will begin in July, enabling more eligible first-time buyers and home movers to buy a home with a deposit as small as 5%. The Economic Secretary to the Treasury said this will “help to incentivise and sustain availability of 91% to 95% loan-to-value mortgages through the economic cycle by providing lenders with a government-backed guarantee”.

Summary of property market activity and legislation under Labour

11^th September 2024 – RRB introduced to Parliament and began passage through House of Commons.

15^th January 2025 – RRB had 1^st Reading in the House of Lords.

31^st January – Two-year ownership rule removed for leaseholders.

7^th February – 12-week consultation launched on improving energy performance of privately rented homes.

3^rd March – Right to manage given to leaseholders and Commonhold White Paper launched.

11^th March – Planning and Infrastructure Bill introduced to Parliament.

1^st April – SDLT rates revert to pre-2022 bandings and rates

20^th June – Consultation on administration of Council Tax launched

1^st July – RRB Report Stage began in House of Lords.

2^nd July – Decent Homes Standard consultation launched.

2^nd July – New Social and Affordable Homes Programme announced.

July – New mortgage guarantee scheme announced.

All in all, it seems that although Labour hasn’t managed to get their proposals enacted as quicky as they said in their manifesto and the early days of government, but they are making reasonable progress. The RRB is in the final stages and looks set to pass into law in the second half of 2025, although it will take time for the various different measures to come into force. And while they are falling short on new housebuilding numbers, there are consultations and financial injections underway that should support an acceleration in this.

If you have any questions about recent and upcoming legislative changes, we’re always here to help. Simply contact your nearest branch, and have a chat with one of our local experts.