July will mark the start of a new parliamentary year, with a possible new party elected. Here is everything letting agents can expect during this month.
July is setting up to be a momentous month for all of the UK. With the general election at the beginning of the month, letting agents need to be aware of which party is elected and what they plan to focus on once in government. Plus an introduction of energy price caps will start on 1 July.
What to look out for in July 2024:
And don't forget, you can download newsletter templates for your landlords to inform them of big changes ahead.
A recap of the past three months:
The General Election is coming
Since the announcement of a snap general election made at the end of May, we’ve all been waiting for voting day on 4 July.
From 7am to 10pm on Thursday 4 July, polling stations will open to decide who will become the next leader of the UK government.
Voters do not need to bring their polling card to vote, but they will need a form of photo identification, otherwise, they will be turned away.
The results will be released the following day on 5 July.
There is no set time on when we’ll get the final results. However, during the 2019 general election, the majority was announced at 7am the following day.
If you’re still undecided on which party to vote for on 4 July, Goodlord has put together guides on what each political party promises for the general election.
Visit Goodlord’s General Election Hub to find out more
Energy Price Caps introduced
Ofgem announced a cap on gas and electricity bills from 1 July. This cap will run until 30 September 2024.
The caps will limit the maximum price of the units of gas and electricity rather than the total bill.
Despite energy prices being at their lowest levels since February 2022, they are still an average of £400 higher than pre-pandemic.
For a dual-fuel household paying direct debit, average energy bills in England, Wales and Scotland will become approximately £1,568 a year.
The cap will be reduced by 7%, or £122 a year, in comparison to the last price cap.
However, your energy bills could be higher or lower, depending on how much energy you use. The price cap is the maximum amount suppliers can charge for gas and electricity.
The Kings Speech
Following the General Election, parliament has been called to meet on Tuesday 9 July, where new MPs will be sworn in.
On Wednesday 17 July, King Charles will host a speech in the House of Lords and start the State Opening of Parliament.
The King's Speech will mark the start of the parliamentary year and is written by the newly appointed political party.
During the speech, we will be told about any proposed laws and announcements the government plans to focus on in the upcoming months. The House of Commons will also meet on this day to begin debating the contents of the King’s Speech.
Sign up for our mailing list to get updates on the King's Speech directly to your inbox.
June 2024 - lettings recap
1. End of Multiple Dwellings Relief
Originally introduced in 2011, Multiple Dwellings Relief (MDR) was created to encourage investments in residential property and boost the housing supply within the private rental sector.
MDR meant that if someone was purchasing two or more properties in a transaction, “Stamp Duty Land Tax (SDLT) was reduced by a relief”.
Buyers could claim tax breaks through the MDR scheme, with a minimum of 1% of the amount paid for the dwelling.
However, as announced in the Spring Budget earlier this year, MDR would end on 1 June. This was encouraged by HMRC who created consultations and reports on whether this relief was encouraging housing supply in the private rental sector.
For landlords in the sector, the end of this policy could create higher costs associated when increasing their portfolio. For letting agents, this could also impact the housing supply within the sector.
Any purchases made or not finished after 1 June 2024 will therefore not receive any relief.
2. Preparation for the General Election
On the 20 May, Prime Minister Rishi Sunak announced the UK General Election for the 4 July. Throughout June, there are key dates letting agents should be aware of that will help prepare before July.
The deadline to register to vote is on 18 June. If you cannot vote on the day, you must also register for a postal vote by 19 June. You can also to register vote by proxy, meaning that someone can vote on your behalf, by the 26 June.
You can check if you need to register to vote by visiting your local council’s website.
The political parties' complete manifestos are expected to be released in June. While there is no set date on when manifestos must be released, the Institute for Government explained “Labour and Conservative manifestos have been launched between 18 and 29 days before the election. That means they will likely launch between 5 and 16 June.”
The first debate for the general election between the leader of the Conservative Party, Rishi Sunak, and the leader of the Labour Party, Sir Kier Starmer, will take place on 4 June at 9pm.
If this feels like a lot to keep up with, subscribe to Goodlord’s newsletter and we’ll keep you up-to-date with everything about the general election.
3. A possible decrease in interest rates
Interest rates determine “how high the cost of borrowing is, or high the rewards are for saving”. This is determined by inflation rates, the increase in the price of something over time.
In May, the Bank of England held interest rates at 5.25%, which is currently the highest rates have been for the last 16 years. As of April 2024, the inflation rate for the UK is at 2.3%.
However, for interest rates to drop further, Bank of England’s Governor Andrew Bailey said he needs to “see more evidence" in inflation rates reducing before interest rates can then be lowered.
But what does this mean for June? The next interest rate announcement will be on 20 June, following the inflation figures being released on 19 June. If the inflation rate is close to the 2% target, the interest rates should also be lowered.
However, despite the promising decrease in inflation rates over the past months, the general election could affect them in the future.
For letting agents, having an understanding of interest rates is key, as they affect mortgage rates as well as saving or credit card rates, which could affect their landlords.
May 2024 - lettings recap
1. Scottish committees launch consultation on new Housing Bill
Following the closure of Scotland’s rent caps at the end of March 2024, the Government has introduced new proposals and regulations for the private rental sector, with the Housing (Scotland) Bill.
Originally introduced in April, the Bill is divided into six parts focusing on elements such as rent control, eviction procedures, tenant rights, and homelessness prevention.
The Scottish Goverment has launched a public consultation on the Bill and some key areas of focus, which will close on 17 May. These key areas are:
- Rent control mechanisms and affordability measures
- Tenants right for pets in lets and modify a property
- How local authorities can proactively prevent homelessness
- Enhancement of eviction procedures and tenant protections
You can submit your views on the Bill before 17 May here
2. Leasehold and Freehold (Reform) Bill and Renters (Reform) Bill enters the House of Lords
Two integral bills for the private housing sector have entered the House of Lords in April and will be debated this month.
The Leasehold and Freehold Bill is currently in the Report stage of the House of Lords process, with only one more reading to go before it enters the final two stages.
This bill will help landlords and tenants and aims to improve and promote fairness for the growing number of leaseholders in England and Wales.
The Renters (Reform) Bill entered its second reading on 1 May, with three more stages left to go in the House of Lords.
First introduced in May 2023, this bill will affect letting agents, landlords and tenants strengthen and reform the private rental sector.
Once both Bills have passed in the House of Lords, there will need to be a consideration of any amendments made to the Bill, before it can achieve Royal Assent and become law.
While it is not clear how long it will take for both Bills to be passed through the House of Lords, it is going significantly quicker than its time in the House of Commons. Letting agents should be aware of both bills and when they will become law, as it’ll cause major ripples in the private rental sector.
3. Local and mayoral elections
On 2 May, local authorities around the United Kingdom will be holding elections for their Government. This will be the most accurate snapshot of what the UK population thinks of their local and general government before a possible General Election in 2024.
Some of the elections include:
- Local Government Elections in England
- Local authority mayoral elections
- Combined authority mayoral elections
- Greater London Authority elections
With 388 local councils in England and about 20,000 councillors, the local government has control over housing, council tax and transport in their local community.
Find out more on Conservatives and Labour’s housing proposals and plans
April 2024 - lettings recap
1. Local Housing Allowance
Local Housing Allowance (LHA) is used to calculate housing benefits for tenants from private landlords.
This is dictated by the Department for Work and Pensions and is based on the private market rents being paid by tenants in a Broad Rental Market Area (BRMA).
From the start of April 2024, the government plans to raise LHA which will benefit some of the poorest families on universal credit or housing benefit and will gain around £800 a year.
The amount of local housing allowance is dependent on the area where the property is based. You can find out the rates by postcode or local authority here.
2. Capital gains tax is reducing
From 6 April 2024, landlords who own properties in their name will have a smaller Capital Gains Tax.
Capital Gains Tax applies when someone makes a profit from selling a property that isn’t their main home. This includes selling buy-to-let properties, business premises, land, and inherited properties.
As mentioned in the Spring Budget, the tax will be reduced from 28% to 24%. This means that if landlords are really selling up, they will be charged less by this tax.
Find out the five key letting agents should know from the Spring Budget
3. VAT Registration Threshold for short-term lets
Residential properties are exempt from VAT. However, an increase in the VAT registration threshold may soon affect landlords with holiday accommodation and short-term lets.
As announced in the Spring Budget this year, the VAT threshold will increase from £85,000 a year to £90,000, starting on 1 April 2024.
This means that any landlords earning under the £90,000 threshold will not have to register for VAT, and can earn more without being taxed.
3. Further Industry and Regulators Committee Evidence sessions
The House of Lords Industry and Regulations Committee began its inquiry to determine whether there should be a new industry regulator in February of this year.
A further session will resume on 5 March and will include evidence from The Property Institute, Propertymark, The Property Ombudsman and National Trading Standards.
In February’s session, the Industry and Regulators Committee discussed conflicts between tenants and agents, and the current issues for leasehold and freehold within England.
4. The Leasehold and Freehold Bill enters the Committee Stage
The Leasehold and Freehold Bill will enter the committee stage in April. Since being unveiled in November 2023, this bill has caused a lot of controversy within the private rental sector.
In March 2024, it was reported, following a consultation, it was reported that Michael Gove, Secretary of State for Levelling Up, Housing and Communities, may abolish the introduction of "peppercorn" rates, a key element of the Leasehold and Freehold Bill.
The Committee stage of the Bill should iron out the current issue on ground rents and how transparent service charges will be in the future.
Find out more about the Leasehold and Freehold Reform Bill
