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The Queen's Speech's impact on landlords
11 June 2015
In the first Conservative majority Queen’s Speech since 1996, her Majesty has announced over 20 Bills that the Government will propose to introduce. We have highlighted the three most important ones below.
• The Housing Bill which looks to extend right-to-buy discounts to 1.3 million housing association tenants.
Originally introduced by Margaret Thatcher’s government, the Right-to-buy scheme enables tenants who have previously rented council properties to buy their homes at a discount. David Cameron’s proposed scheme would allow tenants of housing associations to do the same, receiving the same discounts as council tenants, which could potentially shake up the housing market considerably.
A key Conservative election pledge, the scheme would allow tenants to benefit from discounts starting at 35% on the market value of a house and 50% on a flat, provided the tenant has rented the property for more than three years. There are additional discounts if tenants have rented in the public sector for longer than this period. Currently, discounts in London are capped at £102,700 and the rest of England at £77,000.
The policy has attracted criticism from housing associations, who demanded compensation payments for making housing stock available to their tenants at discounted prices, but the government has promised to refund associations.
Under the new scheme, councils are also forced to sell 5% of most valuable housing once it becomes vacant.
Proceeds will go into building more affordable and cheaper properties as well as freeing up brownfield land, thus increasing the national housing supply. However, the National Housing Federation (NHF) claims councils are already having trouble identifying enough land to build on, especially in urban areas.
The Bill also includes two other points: the right-to-build scheme, which guarantees people to be allocated land with planning permission to self-build or commission a home to be built for them. And the government also promised the building of 200,000 starter homes available for 20% discount for first-time buyers under 40.
Housing minister, Brandon Lewis, said that this bill shows that the government ensures that ”..anyone who works hard and wants to get on the property ladder should have the opportunity to do so.”
• The Immigration Bill which follows on from the Prime Ministers speech last week which aims to tackle the problem of criminals acting as private landlords whilst exploiting illegal migrants.
Prime Minister David Cameron has promised to put an end to houses packed full of illegal workers. He has promised to achieve this goal by introducing new measures for councils, enabling them to crack down on unscrupulous landlords and to evict illegal migrants more quickly.
The government is looking to introduce a ‘deport first, appeal later’ policy which will make it easier to evict illegal immigrants. The measure will also be extended to all immigration appeals and judicial reviews.
• Cities and Local Government Devolution Bill which may affect housing licensing powers through Governments plan to devolve elected Mayors.
The Cities and Local Government Devolution Bill could potentially see more cities following in Manchester’s footsteps and gaining more powers. Manchester has just seen a £1.5bn housing investment following its devolution last year.
George Osborne has announced that, as long as cities elect their own mayor, he is happy to devolve powers.
National Housing Federation Assistant Director Simon Nunn added “Housing associations are ready and well placed to work with cities and elected mayors to ensure good quality housing is available.”
Furthermore, there are other Bills addressed in the Queen’s Speech that may affect landlords:
• Full Employment and Welfare Benefits Bill which landlords will be interested in due to the roll out of Universal Credit and the removal of Housing Benefit to 18-21 year olds.
However, the charity Shelter has raised concerns about increased homelessness amongst 20,000 young people affected by this reform. While most young people can live with their parents while looking for a job, not all of them can.
• The Scotland Bill implementing the proposals of the Smith Commission which may impact on those Scottish Landlords.
Further devolution could put the Scottish government in control of housing and welfare questions, most importantly regarding Universal Credit. Landlords renting to tenant claiming universal credit could see payments made directly to them instead of tenants.
The bill follows Lord Smith’s commission’s recommendation for further devolution following the referendum for Scottish independence in 2014. However, the new measures would not include control over housing benefit generally.
• English Votes for English Laws being introduced, known as EVEL, which will be of future interest to landlords as housing is already a devolved matter for Wales and Scotland.
EVEL was a key election pledge of the Conservatives, which would see decisions on matters only concerning England or England and Wales being debated and decided on only by English MPs. Currently, Scotland can decide on some of its own laws and also on English and Welsh matters in Westminster. Most relevant to landlords will be areas like housing and welfare.