Next year could be a big one for homeowners and renters, with new property laws that could come into force in 2024.
In November, King Charles III delivered the first King's Speech in over 70 years, which included 20 bills and one draft bill, some of which have been carried over from the last parliamentary session. King Charles referred to the two new laws that are set to improve the property market, the Leasehold and Freehold Bill and the Renters (Reform) Bill.
King Charles III said in his speech: "My Ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackling the exploitation of millions of homeowners through punitive service charges."
The King then said: "Renters will benefit from stronger security of tenure and better value, while landlords will benefit from reforms to provide certainty that they can regain their properties when needed."
Leasehold and Freehold Bill
The Leasehold and Freehold Bill was introduced to Parliament on November 27 and the earliest date it may be passed into law is probably the summer of 2024. At present, if your property is a leasehold, you own the house but not the land it sits on, meaning you pay ground rent to the freeholder.
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This new law will ban this form of homeownership, so anyone who buys a new home in the future will own both the building and the land it's on. This new Bill aims to improve homeownership for millions of leaseholders in England and Wales by making it cheaper and easier for more leaseholders to extend their lease, buy their freehold, and take over management of their building.
The new laws will extend the standard lease term from 90 to 990 years for both houses and flats, with ground rent reduced to zero. This means leaseholders can enjoy their properties without worrying about future lease extensions.
Additionally, the creation of new leasehold houses will be banned, ensuring every new house in England and Wales is freehold from the start. The bill also removes the need for a leaseholder to have owned their property for two years before benefiting from these changes.
Renters (Reform) Bill
The Renters (Reform) Bill received its second reading in Parliament on October 23. Aspects of the Bill could become law next year, but there is no guarantee.
The Bill aims to improve renting in the private sector. It promises better quality accommodation and greater security for renters, while helping landlords reclaim their property quickly when necessary. The bill introduces stronger powers to evict disruptive tenants. This measure, which aims to halve the delay between serving notice for anti-social behaviour and eviction, will be welcomed by both landlords and responsible tenants.
Landlords could kick out tenants who break their agreement or damage the property in just two weeks, under new rules. Also, blanket bans on pets will be scrapped, meaning renters can ask to have a pet and landlords can't say no without a good reason.
The new law will also ban outright refusals to rent to families with children or those on benefits. The government recognises that student rentals often change every year, so they're introducing a rule to make this easier for landlords. However, the Government won't get rid of no-fault evictions until there are stronger rules for possession and a new court process is in place.
Proposed changes for holiday lets
Changes are also coming for holiday lets due to the UK's housing shortage. The government is looking at short-term lets to balance the need for homes with the benefits of tourism. Two consultations are underway on changes to holiday lets, which are expected to start in 2024.
Owners of holiday lets in England could join a registration scheme. They were asked to respond to a consultation by June 7, 2023, to help the government understand how many short-term lets there are and where they are located.
The plans also suggest a new category for short-term rentals, the possibility of permitted development to switch a home to a short-term rental and back again, and potential flexibility for owners to rent out as short-term lets for a limited number of nights. Feedback is also being requested on whether planning permission would be required if the number of rental nights is limited and, if so, how many rental nights should be allowed.
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