Several new laws are coming into place to protect house buyers, tenants and homeowners, after years of being in motion.
The laws will see ground rents banned, and a potential ‘lifetime deposit’ come into force - which should give tenants more rights against law-breaking landlords and excessively high charges in flats.
It’s in addition to 95% mortgages in which the government backs loans taken out with Lloyds, Barclays and Santander and several more lenders.
It comes alongside the extended stamp duty holiday which will now run until the end of June. All purchases up to £500,000 will continue to be tax-free, with a further extension on homes bought up to a value of £250,000 until the end of September - benefiting second movers.
Rightmove estimates that the average stamp duty saving in England is £5,802.
1. Ground rent ban
Ground rent charges are to be banned on new-builds in a bid to protect millions of leaseholders from eye-watering increases every single year.
Under proposed laws confirmed in the Queen’s Speech earlier this month, people in residential long leases will pay no ground rent, other than a fixed peppercorn amount which would protect them from escalating fees.
However it will only apply to new buyers of new-builds - meaning 4.5million leaseholders in England and Wales will not be protected by the law change.
Currently, millions of householders in England own their homes on a leasehold basis and pay an annual ground rent to the freeholder of the property
However some new-builds contain clauses in their leases which allow rents to rise at regular intervals by huge amounts.
Worse, freeholders can increase ground rents whilst failing to offer any benefit to leaseholders.
These loopholes mean millions of people are being forced to pay eye-watering ground rents and costs for extending their lease, sometimes leaving them unable to sell their homes.
However the new law will ban ground rent from rising above the peppercorn amount.
2. Covid bailiff ban to end
From June, a ban on bailiffs being able to use enforcement action to evict tenants will be lifted.
The ban was introduced as an emergency measure during the coronavirus pandemic.
Under it, bailiffs were asked not to carry out an eviction if anyone living in the property had Covid-19 symptoms or was self-isolating.
It ends on May 31, meaning landlords will be able to use enforcement tactics to remove tenants.
3. More rights for pet owners
New rules introduced earlier this year mean landlords can no longer automatically ban tenants from having pets in their property.
The Ministry of Housing, Communities and Local Government announced new guidelines around common household pets in February.
Under the new Model Tenancy Agreement, landlords will no longer be able to issue blanket bans on pets.
Instead, consent for pets will be the default position and landlords will have to object in writing within 28 days of a written pet request from a tenant and provide a good reason.
It hopes to put a stop landlords who issue blanket bans on pets without good reason.
They'll also have to provide a valid reason, such as the property size or surrounding issues, such as a block of flats where owning a pet could be impractical.
Landlords will, however, still be able to charge higher deposits for tenants with pets as long as it is within the cap of five weeks' rent.
Research by Generation Rent in 2019 found tenants are being charged up to £600 a year more in rent if they have pets.
4. Help to Buy
Anyone on the 2013 to 2021 Help-to-Buy scheme had their applications extended until May 31 due to the Covid outbreak and delays on new builds and conveyancing paperwork.
However that extension ends on May 31 and Homes England has confirmed that it will not be extended further.
That means if you’re still going through the motions of a sale, you’ll need to be released from the transaction by the developer or will need to reapply through the new scheme.
Under the new scheme only first-time buyers can get involved, while the loans are capped at 1.5 times the average first-time buyer home in that area - rather than a national limit.
There are also changes to mortgage rules and how much of a loan you can be given.
5. Mandatory electrical checks for tenants
Tenants now get tougher rights against law-breaking landlords thanks to new rules on hazardous homes.
New laws introduced a month ago mean all existing rented properties in England will need an electrical safety inspection every five years by law.
The inspection, known as an EICR or electrical installation condition report will highlight any urgent work needed to ensure the property is safe.
Landlords that fail to comply or have necessary repairs undertaken could face fines of up to £30,000.
Here at Appleby & Townend we are also seeing increased numbers of requests from solicitors asking for electrical safety certificates from house sellers. Whilst there is no legal obligation to do so it seems prudent to get these documents in order prior to a sale being negotiated.
6. Lifetime deposit
The government is consulting on a new lifetime deposit that would allow tenants to automatically transfer deposits between landlords when they move to a new property.
The measures would allow renters to 'passport' deposits electronically instead of having to pay a deposit for their next property while waiting for a refund from their former landlord.
The measures are in addition to a new five week cap on tenancy deposits which became law in 2019.
Ministers are considering the scheme, known as deposit passporting, to make the system simpler for renters.
During the Queen’s Speech, Her Majesty confirmed a Renter Reform White Paper has been drawn up to review reforms for renters – namely a lifelong deposit that they can move from flat to flat.
The planned scheme is designed to ease the pressure on millions of renters who typically need up to five weeks rent to fund a deposit for a new rental home while having money tied up with an existing landlord.
According to the Deposit Protection Service, the average rental deposit is £1,040 in England and Wales, while tenants in London face paying around £1,750 when moving property.
Passporting would allow a direct transfer of funds from the previous landlord to the new one on the day of the move.
The previous landlord would still be able to claim part of the deposit for any damages, and the tenant could top up the deposit if necessary.
7. Eviction notice periods reduced to 4 months
Notice periods - which were previously extended to six months as an emergency measure during the pandemic - will be set at four months from June 1.
Subject to the public health advice and progress with the road map, notice periods will return to pre-pandemic levels from October 1.
The Ministry of Housing, Communities and Local Government said the new measures will allow landlords to access justice, as 45% of private landlords own just one property and are highly vulnerable to rent arrears.
Courts will continue to prioritise the most serious cases, such as those involving anti-social behaviour.
Cllr David Renard, Local Government Association housing spokesman, said: "We recognise that the ban on eviction enforcement, which provided vital reassurance to renters during the pandemic, cannot continue indefinitely.
"However, councils remain concerned over the potential rise in homelessness households may face, and the pressure this will add to already over-stretched homelessness services."
"It is vital there is a plan in place to support and protect households to stay in their homes, in as many cases as possible."
8. New cladding fund – but not for everyone
A new £3.5billion fund is on its way to replace flammable cladding in England - more than three years after Grenfell.
Private flat owners in blocks over 18 metres (six storeys) will no longer have to pay for replacement of the dangerous material after building firms hit them with five-figure bills.
But it won’t benefit everyone as the small print shows the support will exclude those in smaller blocks who will be asked to pay up to £50 a month for “many years” instead.
Flat owners in blocks of four to six storeys - or 11 to 18 metres – will not be covered, the government said.
Instead, these groups will have to take out a £50-a-month loan which will be attached to the property, potentially making it more difficult to sell.
The loans will be "long term" and "low interest" – no guidance has been shared as to how long these loans could last.
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