After the Labour Party’s general election victory, Sir Keir Starmer will be the new prime minister. As a new government assembles, what does this mean for landlords and the rental market? Read on to find out more about what to expect on important topics such as Section 21 evictions, energy efficiency, and landlord tax.

New Government – What Are the Key Issues for Landlords?

As the dust settles on the general election, landlords will be paying close attention to how the Labour party plans to address a range of issues affecting the rental market. These include:

• Rising Costs: Higher mortgage costs and significant tax changes have reduced returns for many landlords.
• Rental Reforms: Plans to scrap Section 21 evictions were dropped before the election, but Labour has promised to revive them.
• Rental Housing Supply: An imbalance of rental supply and demand has led to unsustainable rent rises for tenants in some parts of the country.
• Energy Efficiency: Plans to increase minimum energy efficiency standards in rental properties were scrapped in 2023, but Labour wants to introduce new measures by 2030.

What Are the Labour Party’s Plans for the Rental Market?

The new prime minister, Sir Keir Starmer, said that the general election was all about ‘change’. With a strong majority in place, the Labour Party will now look to act on their manifesto pledges. Labour has a range of plans for the private rental sector, as well as proposals for the tax system which could affect landlords.

Here’s what they’re promising:

• To immediately abolish Section 21 evictions without improvements made to the court system.
• To give tenants powers to challenge unreasonable rent rises.
• To ban rental ‘bidding wars’ between prospective tenants (no details of how this would work have been announced yet).
• To introduce a cap on the amount of rent that can be paid upfront by tenants.
• To extend Awaab’s Law, which requires social landlords to address dangerous hazards such as mould, to the private rental market.
• To introduce new energy efficiency standards for rental properties by 2030 (it’s not clear which EPC rating will be the new minimum).
• To remove the requirement to replace gas boilers by 2030.

Labour’s Plan for Tax

When it comes to tax, Labour has said that it won’t increase the basic, higher, or additional rate of income tax. Corporation tax will also be capped at the current rate of 25 per cent, while VAT and National Insurance rates will remain the same. As Labour will need to raise funds through other means, landlords are being warned to watch out for a potential increase of capital gains tax rates.

What Next for Rental Reforms and the End of Section 21?

In May 2023, the Conservative government published draft legislation for the Renters’ Reform Bill. Described as the biggest change to tenancy law in a generation, the bill included measures to abolish Section 21 evictions and end fixed-term tenancies. The bill was dropped ahead of the general election as it had only passed a second reading in the House of Lords and was awaiting the committee stage. Labour has pledged to scrap Section 21 evictions immediately, so landlords should be prepared for details of how this is going to work soon.

How Do Landlords Feel About the Future?

As part of their 2023 Landlord Report, Simply Business asked 1,500 landlords about their biggest concerns and their plans for the future. Two-thirds (66 per cent) said constantly changing and confusing government legislation is one of their greatest challenges. Participating landlords also called out several challenges that relate to the government, including:

• A lower capital gains tax allowance (38 per cent)
• The reduction of buy-to-let mortgage interest tax relief (36 per cent)
• Rising taxes such as income tax and corporation tax (35 per cent)

On top of this, 20 per cent said the Renters’ Reform Bill is the single biggest threat to the rental market. These challenges appear to be having an impact, with 25 per cent of landlords saying they were planning to sell a property between 2023 and 2024. However, many planned to sit tight, with 50 per cent saying they think buy-to-let remains a good investment.

New Government Elected: Key Dates for Landlords to Look Out For

After moving into 10 Downing Street, Sir Keir Starmer will appoint his cabinet. When it comes to matters affecting landlords, important positions to look out for are:

• Chancellor of the Exchequer
• Secretary of State for Levelling Up, Housing and Communities
• Secretary of State for Business and Trade

Activity in the House of Commons is set to resume on 9 July 2024, with a King’s Speech after the start of a new parliament on 17 July 2024. The King’s Speech will be written by the new government and delivered by King Charles III. It will outline the government’s key policies and new legislation for the coming months.

The Labour Party Conference is due to take place between 22 and 25 September and could give an indication of the government’s key priorities, plus how Sir Keir Starmer has fared in his first few months as prime minister. Another date to watch out for is a potential Autumn Budget in October or November. The Labour Party has previously declared that it would hold one Budget a year, instead of alternating spring and autumn budgets and statements.