Social Housing Speed Read – Housing reform bills announced in the Queen’s Speech

Here are some of the key reforms we can expect over the coming 12 months in the industry.

Social Housing Regulation Bill

This Bill is designed to increase social housing tenants’ rights to better homes and enhance their ability to hold landlords to account. The Social Housing Regulation Bill is due to be introduced to Parliament in May/June 2022.

The Bill strengthens the role of the Regulator by providing them with increased powers to intervene where landlords are underperforming or not dealing effectively with consumer issues which include complaints handling and disrepair. Under the new bill the Regulator only needs to provide landlords with 48 hours’ notice to carry out a survey of a property. If the survey shows a systematic failure by the landlord, the Regulator will have the power to arrange emergency repairs.

Under this new legislation there will be greater consequences for landlords who do not comply, as the draft clauses lift the cap on the level of penalty that the Regulator can impose.  Additionally, this Bill will enable the Regulator to inspect landlords to ensure they are providing tenants with adequate quality of accommodation and services.  Finally, it will ensure that tenants of housing associations will be able to request information from their landlord similarly to the Freedom of Information Act.

It is hoped that the Bill will increase transparency in the tenant/landlord relationship. For example, the Bill will introduce new Tenant Satisfaction Measures which provide that landlords prepare performance improvement plans.

Renters Reform Bill

The Renters Reform Bill aims to create a rental market that is ‘fairer and more effective for tenants and landlords’. At the crux of this Bill is its commitment to abolish the so-called ‘no-fault evictions’ by overturning Section 21 of the Housing Act 1988 which currently provides that landlords do not need to give a reason to end a tenancy. This reform aims to encourage tenants in the private rented sector to challenge poor practice and unfair rent increases without fear of retaliatory eviction. However, whilst abolishing Section 21 will provide security for tenants, the Bill is also expected to strengthen and support landlords who legitimately want to recover their properties. The Bill extends other grounds through which the landlord can gain possessing including when they want to sell or inhabit the property themselves, or where their tenants have fallen into rent arrears.

Another key proposal in the Bill is the creation of a new property portal, where landlords can access information about their responsibilities and where tenants can get access to ‘performance indication’ in order to help them hold their landlord to account. The Bill also revealed that a new Ombudsman will be introduced to enable disputes to be easily resolved without the need to go to court. The Ombudsman will be able to ensure that where a complaint is made, landlords take action to put things right.

This Bill will have a significant impact on letting agents, their landlords and the tenants. Questions remain about whether it will apply retrospectively to tenancies already in place or only to new tenancies going forward; it is hoped that the White Paper will provide more clarity on this area.

Leasehold reforms

The Government also reiterated that the Leasehold Reform (Ground Rent) Act 2022 will come into force on 30 June. Most significantly, the Act  means that landlords will be prevented from requiring a financial ground rent in most new long residential leases. The Government have also indicated that further reforms are in the pipeline. For example, they insist they remain committed to reforming the area by making it cheaper and easier for leaseholders to enfranchise (extend their lease or buy their freehold), and simpler and quicker to take control of the management of their building.

The Government also intend on giving leaseholders more information on what their service charges and other leasehold costs cover and ensuring they are not subject to any unjustified legal costs and can claim their own legal costs from their landlord. A further key proposal is a ban on new leasehold houses so that nearly all houses are freehold from the outset and again a reiteration of the commitment of a reformed commonhold system as an alternative to leasehold ownership.

The implementation of the Leasehold Reform (Ground Rent) Act 2022 is a positive step for leaseholders, but we can expect further changes in the years to come on this area.

Levelling Up and Regeneration Bill

The Bill creates a new model of combined authority, referred to as the ‘County Deal’. This model is designed to empower local leaders to develop and reflect the needs of local communities. Local authorities will be also be given enhanced powers to bring empty premises back into use and instigate rental auctions of vacant commercial premises, with the aim of improving the use of local space and environment. The Bill places a duty on the Government to set Levelling Up missions and produce an annual report updating on progress.

The Bill also reforms the planning provisions by setting out a new infrastructure levy that will replace Section 106 Agreements, also known as planning obligations. The aim of this reform is to give residents more involvement in local development. This is designed to capture the financial value of the development and to deliver the infrastructure that communities need.

It is clear that the current housing legislation is set to be amended and reformed significantly over the next year. If you have questions about these prospective changes, or if you would like advice on how to best prepare your business, please do not hesitate to contact John Murray, or a member of our expert Social Housing Team.