Property News: Changes for 2023/2024 to be aware of

It looks like 2023/2024 is set to be another significant year for the property sector with many legislative changes, consultations and reviews underway. Most form part of the Government’s levelling up proposals in an attempt to provide more housing stock and a fairer balance between the interests of tenants and landlords. These include the following:

Renters Reform Bill

The Renters Reform Bill published on 17 May 2023 looks set to shake up the private rented sector in England with the widest set of reforms for years. These include the abolition of s21 evictions and fixed term tenancies, longer notice for rent increases, minimum housing standards, wider s8 eviction powers, blanket bans on renting to families with children or on benefits to be made illegal, improved rights to have pets, a property portal, and a new ombudsman system. See the earlier blog on some of the proposals Proposed reforms for the private rented sector: An update on the Levelling Up, Housing and Communities Committee’s Report (simply-docs.co.uk) The Bill is available on gov.uk although much of the detail is still awaited - as an example, there is only a pledge to overhaul the legal process at this stage.

Two new consultations on proposed changes to holiday lets

With a housing shortage in the UK, the Government now appears to be focussing on touristic short-term lets, such as Airbnb, with a view to providing local communities greater control over their use, whilst trying to balance the lack of housing against the benefits tourism brings to these areas. Property owners with holiday lets in England wishing to respond must do so to each consultation separately by 7 June 2023. Changes are anticipated in 2024.

• New registration scheme to help build a picture on the number and location of short-term lets to assess the impact on local communities. A range of options from the potential registration framework, registration process by owner; fees; properties requiring registration; exempt properties; how often registration should take place; information to be held on the register and compliance information are identified and on which responses are being sought. Full details can be found here registration-scheme-for-short-term-lets-in-England
• New short term lets planning consent where not used as a sole or main home and associated permitted development rights. Proposals include a new use class for short term lets, the potential for permitted development to change a dwelling to short term let and vice versa and potential flexibility for owners to let out as short term lets for a number of nights only. Responses are also being sought on whether planning would be needed if the number of letting nights is restricted and if so the number of letting nights available. Full details can be found here use-class-for-short-term-lets-and-associated-permitted-development-rights

Second homes & business rates

Many second homeowners previously qualified for business rates relief at £0 if their property was advertised for holiday lets for a prescribed number of days each year even if a property was never actually let out. From April 2023, this changed and council tax will be payable on most second homes. Business rates relief will now only apply where a second homeowner can evidence to the VOA that the property will be available and let for a prescribed number of nights in each year. There are differences in the VOA qualifying criteria depending on whether the property is in England or Wales. For more details see business-rates-rules-for-self-catering-properties

The next Renting Homes (Wales) Act 2016 deadlines are approaching

All private rented tenancies in Wales in existence on 1 December 2022 automatically converted to standard occupation contracts. To comply with the new requirements, landlords are required to issue written statements to “contract holders” on those “original” converted contract terms before 1 June 2023. A further draft amendment has just been published which clarifies that where there were already agreed terms for a renewal in place or where there has been a change in the identity of the contract-holder since 1 December 2022, the written statement must be provided by 14 June 2023. Full details on creating converted occupation contracts can be found here creating-converted-occupation-contract-guidance-landlords

Consultation on High Street rental auctions

A proposed Government solution to regenerate high streets and cut down on their economic and physical decline is to grant local authorities discretionary powers to auction the rental rights of commercial properties that have been unoccupied for more than 12 months in a 24-month period. Successful bidders will enter into standard form lease documentation with the landlord upon completion of the auction for a term of between 1-5 years. Consultation on the auction process, documentation, auction costs, permitted development rights and the disapplication of MEES is open until 23 June 2023. Details can be found here consultations/high-street-rental-auctions/high-street-rental-auctions

Non-Domestic Rating Reforms

A bill amending the non-domestic rating system was put before parliament in late March. It is expected to come into effect around April 2024. Existing reliefs are to continue. Changes include a new digital portal with a requirement for ratepayers to provide annual information to the VOA; triennial ratings revaluations; and the introduction of new rates reliefs e.g., no increase in the rateable value resulting from “qualifying” improvement works carried out to a property for 12 months; discretionary reliefs for “qualifying” rural post offices, general stores and food store; and full relief for properties providing heat networks. To read the Bill https://bills.parliament.uk/bills/3442

Business Tenancies - Law Commission review the Landlord & Tenant Act 1954

The 1954 Act is the key legislation affecting business premises and been in place for almost 70 years. A review has been commissioned as a further part of the Government’s levelling up plans. The proposed detail of the review is awaited, but the Commission is expected to overhaul the current security of tenure provisions within the Act. It is anticipated that the Commission will look at ways of modernising the existing framework to make it more efficient and less bureaucratic.

A consultation paper is expected from the Commission by December 2023.