Our November policy feature looks into the Budget’s impact on the property sector, newly proposed amendments to the Renters’ Rights Bill, and the Conservative Party’s new shadow housing secretary.
Renters’ Rights Bill amendments
The Renters’ Rights Bill has completed its committee stage in the House of Commons, in which MPs analysed the bill line by line, took evidence from outside groups and proposed amendments.
Some of the more impactful amendments put forward by committee members include:
- Preventing landlords from requesting or taking large amounts of rent in advance of a tenancy. One amendment proposes limiting landlords to three months’ rent up-front, while another would limit it to one month.
- Significant restrictions on how rent guarantors can be used. Landlords would not be able to require or accept a guarantor when the tenant has provided a deposit, paid more than one month’s rent upfront, or passed affordability checks. When used, guarantors would only be liable for losses caused by the individual tenant they are guaranteeing in the case of a joint tenancy, and their liability would be capped at six months’ rent.
- Removing the ability of local authorities to impose selective licensing.
- Increasing the length of selective licensing schemes from five years to 10 years.
- Lowering the standard of proof required for a First-tier Tribunal to award a Rent Repayment Order to a tenant in illegal eviction cases. The Tribunal would only have to find that the landlord had acted illegally on the balance of probabilities instead of beyond reasonable doubt.
Not all of these are backed by the government, and any amendments will have to be voted on in parliament before they are added to the bill. You can read a consolidated list of amendments here.
The bill has now entered the report stage, during which all MPs will have the chance to add and debate more amendments. It will then go to its third reading – the final vote in the Commons before it is sent to the House of Lords. No date has been set yet for a vote, but it could well complete its passage through the Commons before the next parliamentary recess begins on 17 December.
Budget – Few major changes, but some impact on the industry
The Budget on 30 October didn’t have much for property professionals to get their teeth into. However, some of the measures included will affect the sales and rental markets – as will some of the things the government left out.
- The additional stamp duty on investment property purchases (and other additional homes) was increased from 3% to 5% from 31 October. Nationwide estimates that this will add £4,000 to the average cost of a buy-to-let property.
- Capital Gains Tax (CGT) on residential properties was left unchanged. Meanwhile, CGT rates on the sale of other assets were increased to match the rates on residential property – 18% within a taxpayer’s unused basic rate band, and 28% for higher rate taxpayers. This could make buy to let more attractive compared to other investments.
- Local Housing Allowance (LHA) will be left frozen until at least April 2026. Rates were increased in last year’s Budget, but according to the Office for National Statistics, rents have since increased by 8.4%. The Joseph Rowntree Foundation estimates that private renters on LHA will be £243 a year worse off.
- As expected, the temporary cuts to stamp duty will be allowed to expire in March 2025. First-time buyers will once again pay stamp duty on any amount over £300,000. Other buyers will go back to paying 2% on any amount between £125,001 and £250,000.
Conservatives appoint new shadow housing secretary
The Conservative Party has picked Kevin Hollinrake as shadow housing secretary. An MP since 2019, he has extensive experience in the property sector. He co-founded Hunters Estate Agents, which now has more than 200 branches nationwide, and also owns a buy-to-let portfolio. Now that he is shadow housing secretary, he is likely to challenge Labour’s Renters’ Rights Bill. Under the Conservative government, he warned that their plans to scrap Section 21 evictions could reduce housing supply in the private rented sector.
Other regulation headlines
Help to Buy generates significant return on investment for taxpayers – HBF – Property Industry Eye
Labour promises to kick dodgy letting agents out of industry – LandlordZONE
Employment Rights Bill – How will it affect letting agents? – Letting Agent Today
