The King's Speech 2023: Takeaways for Landlords and Letting Agents

The King's Speech is an annual event where the monarch outlines the government's priorities for the year ahead. This year, King Charles III delivered his first speech, offering insights into the government's agenda. Here are three important takeaways for landlords and letting agents:

1. Strengthening Tenant Rights and Landlord Reassurance

The King's Speech reaffirmed the government's commitment to the Renters (Reform) Bill, signaling more security for renters and additional reassurance for landlords. This bill, which passed its second reading in Parliament in October 2023, aims to bolster the rights of tenants in England while addressing landlord concerns.

One of the headline features of the Renters (Reform) Bill is the abolishment of Section 21, also known as "no-fault evictions." This commitment was initially outlined in the Queen's Speech of 2019. The bill's first version, published in May 2023, continued to emphasize the removal of Section 21 and proposed amending and strengthening grounds for Section 8, allowing landlords to reclaim their properties.

In October 2023, the government highlighted the need for significant reforms in the court process before Section 21 could be abolished. However, the King's Speech did not offer further clarity on the timeline or criteria for these court reforms.

2. The Leasehold Bill: Making Homeownership Easier

King Charles III reiterated the government's dedication to making it more cost-effective and accessible for homeowners to purchase the leasehold of a property while putting an end to "punitive" service charges.
This commitment implies forthcoming legislative changes in leasehold reforms, such as:

• Simplifying the process for leaseholders to acquire property freeholds or extend their leaseholds.
• Limiting ground rent costs to 0.1% of the freehold value, effectively introducing nominal "peppercorn" ground rents.
• Altering ownership prerequisites for leaseholders to access these reforms, including the requirement of property ownership for a minimum duration.

The property sector should stay vigilant for future leasehold-related legislation. There is speculation that, in the future, all houses may be sold as freehold properties.

3. Advancing Towards Net Zero and Energy Efficiency

The government has made a firm commitment to achieving Net Zero emissions by 2025. This pledge is expected to have a significant impact on the property sector. The government aims to ensure energy independence and invest in renewable energy sources.

Rising energy bills due to the cost of living crisis and the conflict in Ukraine have prompted this focus on energy efficiency. The government's goal is to facilitate the transition while avoiding undue financial burdens on households.

Previously, the government had announced that landlords would be required to upgrade their properties to an EPC C rating by 2025 for new tenancies and by 2028 for all tenancies. However, in September 2023, Prime Minister Rishi Sunak revealed that homeowners and landlords would no longer face the original energy efficiency targets' stringent deadlines.

In conclusion, the King's Speech for 2023 brings significant developments for the rental and property sectors. Landlords and letting agents should stay informed and adapt to these evolving policies and commitments.

This article is intended as a guide only and does not constitute legal advice. For more information, visit gov.uk.