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Boost for landlords as Tories shelve no-fault evictions ban

Gove
Gove

How will a potential Labour government affect your property portfolio? Get in touch: money@telegraph.co.uk

A key Conservative manifesto pledge to overhaul the rental sector will no longer go ahead in a boost for landlords.

The Rental Reform Bill will not be part of the “wash-up” process, which sees important legislation rushed through before Parliament is prorogued at the end of the day.

The bill, which had already been watered down after a backlash from landlord Tory MPs, had included a commitment to ban so-called “no-fault” evictions, known as Section 21.

In March, the government already confirmed that no-fault evictions would not be pushed through without a full review of the courts system after backlash from campaign groups and landlord MPs.

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Landlords had warned that the legislation could leave them without access to their homes due to judicial system delays since the pandemic.

The bill was first introduced in the House of Commons in May 2023, but had been delayed as negotiations between tenancy campaigners and landlord groups took place.

Around 163,000 privately rented homes have disappeared from the market since it was announced in 2019, according to estate agents Hamptons.

Jeremy Leaf, estate agent and a former Royal Institute of Chartered Surveyors residential chairman, said that the death of the bill in this Parliament would prolong the uncertainty for landlords.

“The other point with all these bills which are being held is that the uncertainty is prolonged, and that uncertainty creates problems,” Mr Leaf said.

Timothy Douglas, of industry body Propertymark, said: “The legislation was introduced very late on and whilst attempting to please everyone, it failed to please anyone.

“Many agents will be relieved that the current government’s plans to meddle with fixed term tenancies and reforming eviction grounds with little realisation of the unintended consequences will no longer pass, but this is soon outweighed by a sense of uncertainty and apprehension as to what the next government will do.”

Ben Beadle, chief executive of the National Residential Landlords Association, which represents buy-to-let homeowners, said: “The news comes despite the fact that the Bill was in a state which would work for tenants and responsible landlords.

“There has been too much dithering and delay in government, and a failure to be clear about how to ensure changes would work in practice.”

Prime Minister Rishi Sunak announced on Wednesday that an election would be held on July 4, with the final day of Parliament being May 30. But due to a planned recess, today is the final day Parliament will sit before the election – and the last chance for the Government to pass legislation.

The final list of bills to be voted on was negotiated on Thursday, as ministers rushed to ensure that their pet projects became law.

Ben Twomey, chief executive of campaign group Generation Rent, said the government has failed in its pledge: “Abandoning the Renters’ Reform Bill as parliament dissolves means the government has failed in its promise to renters at the last election to deliver a fairer tenancy system,” he said.

But another key 2019 manifesto commitment on leasehold will be debated in the House of Lords today, following intervention from Lord Bailey, who wrote on X (formerly Twitter) on Thursday: “Let’s get this done for the 5m households that need it.”

The Conservatives promised in 2019 to stop the sale of new leasehold homes, to provide mechanisms for redress for tenants and to cap ground rent at a “peppercorn”.

But it is not yet clear whether a ground rent cap, a key aspect of the bill, will be included.

Michael Gove had been said to be considering a cap of £250 per year, but had been accused by investors of “daylight robbery” for potentially reducing their annual income.

A spokesman for the Leasehold Knowledge Partnership charity said that the “genie could not be put back in the bottle”.

The spokesman continued: “There are too many MPs, there are too many leaseholders that know about the fundamental problems with the systems. The parties have made very clear that their intention is to get rid of leasehold.”

Harry Scoffin, a campaigner on leasehold issues, said the bill being passed through the House of Lords would prove to be a relief for many leaseholders.

He said: “The bill, many leaseholders felt it was suboptimal, but would have taken it, especially knowing that it was completely uncertain with Labour.”

Matthew Pennycook MP, Labour’s Shadow Minister for Housing, said that if elected, his party would abolish Section 21 immediately.

He said: “The Tories’ decision to cave in to vested interests and abandon their already weakened Renters Reform Bill leaves in tatters the promises they made to private tenants five years ago.”