What next for the private rented sector and renters' reform under Rishi Sunak?

25 October 2022

Liz Truss has resigned as Prime Minister, with Rishi Sunak appointed in her place. Here's what this could mean for lettings.

Rishi Sunak has become Prime Minister, after Liz Truss resigned on 20 October 2022 due to a series of missteps in the mini-budget which caused the pound to drop in value. Here's how this new appointment may affect the lettings sector.

What could this mean for the Renters' Reform Bill?

Sean Hooker, Head of Redress at the Property Redress Scheme, believes that this will change little for the Renters' Reform Bill.

"My gut reaction is that the current political uncertainty doesn't change anything for the Renters' Reform Bill," he says. "The politicians turn up on the television and speak in parliament - but the hard graft is going on behind the scenes with the civil servants.

"They haven't stopped working on this project. I've had lots of meetings and there've been committees that various people in the industry have been feeding into it."

"We do live in strange times at the moment with changes of ministers and political direction. These are things that nobody would have predicted, even three or four months ago. But, despite that, I believe that the core of the bill is being worked on and is going to be delivered."

Michael Gove is now back as also now Secretary of State for Levelling Up, Housing and Communities. As the driving force behind renters' reform, this suggests that the bill will still be a priority under the new government. 

Head of Policy and Campaigns at Propertymark, Timothy Douglas, says: "Mr Gove previously focussed on regional disparities and fixing the cladding scandal, but he now needs to go further and tackle the supply crisis in the private rented sector, implement the next steps for leasehold reform, set out the UK government’s plans for home buying and selling as well engage with the sector to get more people onto the housing ladder and stimulate right sizing to release large, family homes."

What are Rishi Sunak's housing views?

Sunak has not commented directly on renters' reform, although he has previously shared his priorities for housing.

Back in August, he showed support for home ownership, stating that he wanted today's renters to become capitalists: "We are the standard bearers for capitalism. But we can't expect future generations to share our belief in capitalism if they can't get their hands on capital. That's why I'll do whatever it takes to build affordable, plentiful housing, building the next generation of Conservative voters.”

His proposals included requiring developers to finish each project before being granted planning permission for another development in the same area, and giving councils more power to buy undeveloped land at a reduced rate, if it's not built on in a given time frame. 

He has also focused his attentions on brownfield development and protecting the "green belt". 

"Green belt land is extremely precious in the UK. Over the last few years we’ve seen too many examples of local councils circumventing the views of residents by taking land out of the green belt for development, but I will put a stop to it," he says.

“More homes can be built while protecting the green belt and our most precious landscapes. Data shows that well over a million homes could be built across the country on brownfield sites, with particularly high capacity in the North West, Yorkshire, and the West Midlands."

Will mortgage rates dip again with Rishi Sunak's appointment?

Reports in the days after Rishi Sunak's appointment show that mortgage interest rates have started to drop, with some lenders, such as Santander and Yorkshire Building Society's Accord Mortgages, cutting their rates. 

The average two-year fixed rate mortgage was at 6.65% before Truss's resignation, yet this fell to 6.55% by the following day. 

“After so many banks and building societies either pulled out of the market or dramatically increased their fixed rates, it is good to see lenders lowering their prices again,” says Aaron Strutt of Trinity Financial.

“The cost of funding has come down so we expect more rate reductions over the coming days.”

Will there be a general election - and how could that impact the lettings sector?

There is no constitutional requirement to call a general election based on the current circumstances.

However, there is growing political pressure to call one. Keir Starmer says that the government has lost "control of itself and the economy" - while the Scottish First Minister, Nicola has said that a general election has become a "democratic imperative".

Currently, Labour has a strong 36-point lead in the polls - one of the highest leads ever recorded for the party - meaning that they are expected to win if there were a general election.

The party has previously shown support for rent caps and a rent freeze, a focus on boosting social housing, and making home ownership a reality for 70% of the UK. It would also publish a white paper in its first few weeks in power on renters' reform. This would then be put to a vote within 100 days of winning a general election.

You can read more about Labour's plans for the sector in our guide.

Further reading