State Opening of Parliament Dec 2019

As the world wakes up to the news that only the third ever US president has been impeached the Queen Takes her seat for the State opening of Parliament

This speech has the most legislative changes of any previous speech, with 20 Bills being introduced.

As we expected there will be new legislation with regards to security for tenancies and also an improvement for home ownership.

There will be changes in business taxes which they hope will change the infrastructure of the UK.

As normal there is the increase of the national insurance threshold and the living wage, but no mention of removing of zero hours contracts. 

But what does this mean for property investors and landlords?

We know one of the major pieces of legislation will be the removal of Assured shorthold tenancies being replaced by Assured tenancies. I expect the Rented Homes Bill to be reinstated and commence its journey through Parliament, this Bill holds the key to how the process of removing ASTs will happen, it is expected that this law will come in April 2020 but with a much longer transition period of 3years rather than the normal 12 months.

New grounds for eviction will also be introduced to support landlords who need to regain possession through no fault of the tenant.

It is also expected that combined with the new Assured tenancies will come longer minimum tenancies to bring the UK in line with other European Countries where a standard minimum fixed term is 3years a pose the 6months which we currently have in the UK.

The previous rumbles of rent controls for the UK have not been mentioned for some time but it will be interesting to see if these are brought in as pilot schemes in the highest rental areas of the UKs Cities, again akin to most of Europe. 

Improvements in Home ownership was also mentioned, there hasn’t been any change in this area for sometime, with the Help to Buy scheme proving to be a damp squib with minimal take up and statistics showing that it helped less first time buyers enter the housing ladder than those applying for mortgages in the usual way. 

In addition the Help to Buy ISA which was launched in late 2015 was not published well and when it ended on 30th November 2019 only 256,000 homes had been purchased directly using the ISA, however those who did open the ISA and have not yet used it, can continue to save into it and benefit from the cash bonus until November 2029.

The increase in NI threshold as well as the previously announced thaw of the benefit freeze, tenants will have more disposable income. 

Will this see a rise in rents or will the way tenants are verified need to be brought up to date to avoid landlords having lengthy void periods, at present many tenants on zero hours contracts can’t rent because they fail at the credit referencing stage because they cannot prove continued set income, but if previous rental payment history was set a first priority for affordability would this help improve the market for landlords.

We will now wait to see what Bills are produced by the Government to support their proposals of today.