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What’s new for landlords in 2024?

woman looking ahead to the future of 2024

We now have a new Labour government, who promised in their election manifesto to “overhaul” the regulation of the private rented sector.

Change has become the norm for landlords, and 2024 was set to be a year of even more change in England when various strands of housing policy were due to enter the statute book as new laws and regulations.

This change was set to include the Renters Reform Bill, which was promised in the Conservative’s 2019 Election Manifesto. However, it was abandoned after Rishi Sunak cleared the decks in preparation for a General Election on 4 July.

Now it is the Labour government who will put rental reform on the statute book in a new Renters’ Rights Bill, and continue leasehold reform with a new Leasehold and Commonhold Reform Bill.

Apart from the reform bills, a number of other changes are affecting landlords this year.

This is a guide to 7 changes for landlords in 2024.

Updated: 20 July 2024

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>> Podcast Show notes: Good Landlording – Introducing the new Renters’ Rights Bill

1. The Labour government’s new Renters’ Rights Bill

Landlords are in a period of change and uncertainty. Labour promised to “overhaul the regulation of the private rented sector” in their manifesto, and the notes to the King’s Speech confirmed this will be in a new Renters’ Rights Bill.

The scope of the Renters’ Rights Bill is similar to that of the Renters Reform Bill that had almost made it through parliament by the time that the general election was called.

As well as abolishing Section 21, it will introduce new grounds for possession under Section 8 (although these aren’t specified), enable tenants to challenge rent increases, outlaw “rental bidding wars”, give tenants an implied right to have pets, and many of the other changes that were in the Renters Reform Bill.

We won’t know the full detail until the Renters’ Rights Bill is published. However, although Labour said in their manifesto that they would abolish Section 21 “immediately”, this will not happen straight away. As with any piece of primary legislation, it will need to go through both houses of parliament before it comes into force.

You can find the latest in the related posts below about the Renters Rights Bill and the abolition of Section 21. I’ll keep both blog posts updated.

>> Related Post: What’s in the new Renters’ Rights Bill?

>> Related Post: How and when will Labour abolish Section 21 no fault evictions?

2. The Leasehold and Freehold Reform Act 2024 becomes law

The Leasehold and Freehold Reform Bill is one of the pieces of legislation that was rushed through parliament on 24 May and, unlike the Renters Reform Bill, it received Royal Assent. Although it is now on the statute book, it has not yet come into force. It will therefore be for the Labour government to implement the Act.

For the 38% of landlords who own a leasehold property, the Leasehold and Freehold Reform Act 2024 is one commitment from Boris Johnson’s 2019 election manifesto for the Conservative Party that was delivered. It enables leaseholders to extend leases to up to 990 years, it abolishes marriage value and also limits ground rent. These changes will make it cheaper and easier for leaseholders to extend leases or buy the freehold or share of the freehold, once it comes into effect.

However, we were still waiting for the outcome of the consultation on the restriction of ground rent when the election was called. There had been a lot of press speculation that ground rent will be capped at £250 pa, but this did not happen, and the Leasehold and Freehold Reform Act does not cap ground rent.

It will be for the Labour government to implement the terms of the Act.

>> Related Post: General Election: Where the political parties stand on leasehold reform

>> Related Post: Practical guide to the Leasehold and Freehold Reform Act

3. The new Leasehold and Commonhold Reform Bill

The notes to the King’s Speech confirmed that Labour will bring the Leasehold and Commonhold Reform Bill to “reform the leasehold system, enacting remaining Law Commission recommendations relating to leasehold enfranchisement and the Right to Manage, tackling unregulated and unaffordable ground rents, and removing the disproportionate and draconian threat of forfeiture as a means of ensuring compliance with a lease agreement”.

Technically, only the reinvigoration of commonhold, abolition of forfeiture and regulation of ground rent will be in the new Bill. This is because the government has said that they will consult on the best way to address “fleecehold” and strengthen the right to manage under the powers they already have in the Leasehold and Freehold Reform Act 2024.

The detail published with the King’s Speech doesn’t mention the exact details about capping ground rent, echoing the noncommittal wording in Labour’s manifesto. Instead, the notes say will “tackle existing ground rents by regulating ground rents for existing leaseholders so they no longer face unregulated and unaffordable costs”.

The relaunch of commonhold will be complicated – the summary alone of the 121 recommendations of the Law Commission into commonhold in 2020 extended to over 40 pages. The government announced in the King’s Speech that it would consult on how best to “reinvigorate” commonhold, which has been used in fewer than 20 occasions since it came into force in 2004.

For more detail on what will be in the new Leasehold and Commonhold Reform Bill, see the related post below.

>> Related Post: What will be in the Leasehold and Commonhold Reform Bill?

4. Last full year of lower stamp duty

Amidst the package of announcements made by the then Chancellor Kwasi Kwarteng on 23 September 2022 in his infamous mini budget, was the “permanent” increase of the residential nil-rate tax threshold from £125,000 to £250,000.

However, Jeremy Hunt quietly introduced a sunset clause to this stamp duty reduction in his Autumn Statement on 17 November 2022, so it will now end on 31 March 2025. This means that all buyers will go back to paying the full amount of stamp duty next year.

As with other changes to stamp duty, this may result the surge of transactions by landlords towards the end of 2024 and the beginning of 2025 before the lower stamp duty ends.

It is unclear what the Labour government will do about stamp duty.

>> Useful Resource: What are the rules for calculating stamp duty for landlords?

5. Abolition of pension lifetime allowance from 6 April 2024

One fairly rare bit of good news on the investment side last year was when the government announced that it would abolish the lifetime allowance for pensions (currently £1,073,100) in the Spring Budget 2023. The government started this process by removing the tax charge for exceeding the lifetime allowance from 6 April 2023. The Finance Bill 2024 includes the remaining measures which abolished the lifetime allowance from 6 April 2024.

Why is does this matter to landlords? Many landlords draw down up to 25% of their pension tax free to invest in buy to let properties after they reach 55. They’ll still only be able to withdraw a maximum of £368,275 as the plans now stand, ie 25% of the current lifetime allowance. However, it means that they will no longer need to worry about their investments doing so well that they incur a punitive tax.

Although Rachel Reeves, the Shadow Chancellor, said last year that Labour had plans to revers these changes, this was not in Labour’s election manifesto.

6. Reduction in tax-free allowance for Capital Gains Tax

Landlords who own properties in their own name have had a smaller capital gains tax allowance from 6 April 2024. The annual exempt amount dropped from £6,000 to £3,000 in the 2024-25 tax year. This means more capital gains tax is now payable by unincorporated landlords on capital gains. As if Section 24 wasn’t already enough.

The 2024 Spring Budget announced a modest reduction in the top rate of CGT from 28% to 24% from 6 April 2024. The reduction in the annual exempt allowance mentioned above is still going ahead. It amounts to giving with one hand (to top rate taxpayers) and taking it away with the other. The then Chancellor, Jeremy Hunt, didn’t reduce the rate CGT of 18% for basic rate taxpayers.

7. New guidance from the Competition and Markets Authority on letting?

The Competition and Markets Authority has been carrying out a consumer research project into the “rented housing sector”, focusing on ‘zero-deposit’ schemes, sham licences, guarantees. The CMA is due to report in the spring of 2024 and they expect to update their publication Guidance for lettings professionals on consumer protection law, last published in 2014.

The updated guidance is intended to help landlords, tenants, and letting agents to understand their rights and obligations in relation to consumer protection law. Hopefully, it will also provide further clarity about what clauses in contracts between letting agents and landlords are unfair for “consumer landlords”.

>> Related Post: How to terminate the management contract with your letting agent

what's new for landlords in 2024 with woman looking ahead

13 thoughts on “What’s new for landlords in 2024?”

  1. Hello Suzanne. As usual great news letter. One comment please on CGT. The Capital Gain on a sold property is added to the income of the seller for that tax year. So regardless if the seller is 40% tax payer or not most of the Capital Gain would be taxed at 28%. Regards Colin

  2. ANN TERESA CLARK

    Very interesting content. We are old-timers, who used property as our pension and feel it has been more profitable than investing in traditional pensions. Current legislation seems set to destroy landlords. In London (our area) there is an extreme shortage of rental homes. We need compromise not confrontation.

    1. We are in the same situation, choosing property over poorly performing pensions. We have always charged a competitive rent, way below the market value for good tenants. However, the last few years have been challenging and we have been forced into putting the rent up. We do not want to do this, but at the end of the day we have to make profit. Legislation and interest rates hit everyone including the tenants unfortunately. We are providing homes, but so many landlords are selling up, who can blame them.

  3. Great update. Thank you.
    When will there be fairness? How many landlords serve s21 Notices for possession at the end of the contractual tenancy only to find that the tenant has lost their job in the meantime, is now on housing benefits and therefore unable to find alternative accommodation at a similar rent and IS ADVISED BY THE GOVERNMENT TO REMAIN IN SITU UNTIL THEY CAN BE RE-HOUSED. This is a common situation where private landlords are asked to provide social housing at a discount. Surely this must be addressed in any Rental Reforms?

    1. I would say it’s a good thing that people can’t immediately be evicted after losing their job. After all, the primary use of houses are for people to live in. Not for investors to cream money off and increase house prices for the younger generation.
      Landlords have had it easy in this country because we have worse rental regulations than any EU country and it’s a primary reason for homelessness.

      1. would you really take a loss on your wages to help stop homelessness which leads to huge debts for the landlord who quite often they lose their business altogether ,I’m all for trying to work out a plan with the tenant but basically what happens is they know they can not be evicted so they stop paying rent altogether ..No pay No stay .

      2. You have to decide if you’d be happy for your employer to not pay your wages /salary but insist on you continuing to work unpaid. Would you do it? Landlords are running a business too – a useful one to those who want a rented home but their profit is their income and they have to pay bills too. Not all landlords are multi millionaires 🙈

    2. I have been served a section 21 to be out by the 26th may it is unbelievably hard to find somewhere else to rent as they are far out priced for my wages I moved away from London as it was cheaper Essex and beyond but now unless I can find a guarantor that earns at least 43200 I am unable to lease somewhere I am being told to stay put and I will get help blah blah blah but noone really seems to care you ask questions and someone will get back to me that call never comes I am so stressed now as I am worried that eventually I will be one of the forgotten on the streets (hopefully not ) but it just isn’t set up for working people sadly

  4. Thanks Suzanne,

    Its a very helpful article.

    It’s been a tough years since all the changes in Sec.24 and hopefully they’ll keep Sec. 21 as it is!

    Many thanks. 🙏

  5. All these governments are hell bent on private landlords who provide the housing they don’t or can’t . I think any government who continues to drive landlords away will ultimately regret it and so will all tax payers as they’re going to be footing the bill.

  6. Andrew John Williams

    Very interesting to read.
    I’ve been a tenant in a HMO for 14 years, Can you tell me can the landlord ,ask the 4 tenants + 3 holiday flats pay towards the water rates?Also can she ask another tenant to download another tenancy agreement?
    Yours sincerely
    Andrew Williams
    Concerned tenant

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