The King’s Speech during the opening of Parliament yesterday confirmed the Government’s intention to push on with two key areas of reform within the property sector despite several threatened rebellions by Tory MPs.

This includes the Renters (Reform) Act which will significantly reboot the way landlords and agents rent and manage properties, and banning the sale of leasehold houses – but not apartments.

During his speech, King Charles 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.”

Turning to leasehold, the monarch said his Government would seek 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 Government has already outlawed unfair ground rents.

Rebellions

Both the Renters (Reform) Bill and the leasehold measures have caused a stir among Conservative back benchers, albeit for different reasons.

A threatened Tory rebellion, and heavy lobbying by the NRLA and key figures within the industry including Paul Shamplina, saw the Section 21 notice evictions ban – a key element of the Renters (Reform) Bill – delayed until the struggling courts system is improved.

Also, several Tory MPs have threatened a second rebellion after the Prime Minister revealed plans to water down the Government’s plans to replace the system of leasehold, and instead will now just ban sales of leasehold houses but not apartments.

Rob Poole, a director of property management firm Glide, part of Leaders Romans Group, says: “There has been a lot of noise around replacing leasehold with commonhold, but this is unworkable on many levels.

“With commonhold for large blocks such as those that we manage, dispute resolution is so much more complicated because of the numbers involved, that many disputes may never be revolved. This would be compounded by the lack of a first-tier tribunal.”

Fair balance

Samuel Lear of property law firm Charles Russell Speechlys says a key test of the renting reform legislation, once implemented, will be whether it sufficiently strikes a fair balance between landlords and tenants.

“With landlords already subject to significant statutory obligations, an unintended consequence of not striking that fair balance is that landlords could decide to leave the market altogether, causing further supply issues and potentially adversely affecting tenants,” he says.

Timothy Douglas (pictured), Head of Policy and Campaigns at Propertymark, says: “Many agents and leaseholders will be relieved that plans have been set out in the King’s Speech for new legislation to further reform the leasehold system.

“This is long overdue, and it is welcome that the UK Government has recognised the importance of reforming the court system and protecting the rights of landlords to get their property back when things go wrong before significant changes to private renting in England are introduced.”

Watch the speech in full.