A new Government is in place and Parliament will be swearing in MPs Tuesday 9th July. There is a new Secretary of State at the Department for Levelling Up, Housing & Communities and a new legislative programme will be officially unveiled during the King’s Speech on 17th July. The current stabilisation of interest rates and inflation levels, although still higher than through last decade, will hopefully help create some economic stability but huge fiscal challenges remain.

Navigating Fiscal Challenges

The challenge for the Private Rented Sector (PRS) lies not only in what the government will do but in what it can do, given financial constraints. The Labour Party's proposed changes are eagerly anticipated and, likely, the ability to bring ‘Change’ via regulation will probably be the main area of activity that affects the PRS.

Potential tax changes (capital gains?) may mean many PRS landlords will decide to hold on to their properties rather than sell them due to any fear of higher tax levels come the autumn Budget meaning that any threats of a major sell-off within the PRS may not come to pass. The upcoming departmental spending review will be important in shedding official light on where the priorities of this new Government will lie in relation to housing; its provision and its regulation.

Housing - Labour's Ambitious Target

1.5 million new homes built in five years is a bold strategy and means there will be change to the Planning system and this has already been well-telegraphed.

Renters Reform Bill

The PRS will probably see the return, in some adapted form, of the recently dropped Renter’s Reform Bill (probably with a new title) and the introduction of the Decent Homes Standard to the PRS along with an update to the Housing Health & Safety System (HHSRS) will take place without argument (except possibly around their place in the legislative timetable for this parliamentary session).

Licensing and Standards

As demonstrated by selective and additional licensing schemes, when implemented effectively, they prove successful in enhancing standards of PRS properties and management. Therefore, they will continue to serve as a crucial tool in the Local Authority toolbox for raising sector standards. Labour have historically shown support for these schemes, underscoring the potential longevity and impact on the PRS. The 20% (size of local PRS or borough geographical area) rule, whereby Local Authorities wishing to implement selective licensing are required to appeal for licensing scheme approval to the Secretary of State will be reviewed and, potentially, either a higher percentage threshold or complete abolition will likely be adopted.

Home Safe has demonstrated through its collaboration as a delivery support partner to Local Authorities that multiple property licensing inspections, combined with efficient compliance management systems, play a crucial role in improving standards and achieving better outcomes for thousands of tenants. This approach also benefits Local Authorities and allied agencies like local health trusts by ensuring improved housing conditions across the board.

Decent Homes Standard and HHSRS Reforms

With growing pressure from Homelessness applications to Local Authorities and the imperative to match applicant families and individuals with appropriate housing, being able to place people in decent and safe housing has never been more important. Selective licensing can be a route enabling Local Authorities to satisfy this imperative in this era of intense budgetary constraints.

The introduction of the decent homes standard to the PRS could be done relatively quickly as it is already clear what that standard should be (given it already exists for the social rented sector). Those PRS landlords who do not comply with the standard can be dealt with quickly and efficiently, despite any recruitment freeze, within existing officer staffing levels using a partnership model.

EPC Upgrade Implications

The PRS will also see a push to a raised Energy Performance Certificate rating of level C by either 2028 or 2030 (thus within the foreseeable lifetime of the new Government) meaning widespread energy performance upgrade work across a wide range of residential properties, especially in the PRS. This will significantly alter the private rented sector and will entail significant costs to many landlords. Ensuring properties meet the new EPC rating will pose a notable challenge for Local Authorities, requiring rigorous inspections and compliance checks.

Working in partnership with Home Safe, Local Authorities can manage this upcoming upgrade programme, utilise inspection reports and compile the necessary data on the relevant energy issues that are affecting the PRS housing in their borough. If the new Government’s aims, either assumed or announced, for the PRS are to be achieved then it will be important for Local Authorities to have direct knowledge of what the state of play is regarding privately rented properties in their areas whichever of the above-mentioned policies or legislative plans come to pass.