In the wake of a general election which left the Conservative party without an outright majority, the Queen’s Speech was always likely to be a muted affair. Indeed, several key Tory manifesto plans were delayed or axed altogether, leaving proposed legislation to deliver Brexit to take centre stage, with eight of the 27 total bills relating to Brexit and its implications for key industries.
In addition to a bill to convert EU rules into UK law, the speech included outline measures on trade, immigration, fisheries, nuclear safety, agriculture and sanctions. Specific detail on these items was relatively sparse however, and Mrs May will no doubt face a number of challenges as she attempts to steer the bills through a hung parliament over the next two years.
That said, observers will have noticed, and indeed broadly welcomed, her recent softening rhetoric around reaching out to business and other political parties to achieve a Brexit that commands “maximum support”. This bodes well for maintaining strength in the economy as Britain looks to navigate a smooth path outside the EU.
Looking specifically at housing, the big item for property investors to consider is the government’s plan to ban fees to landlords and letting agents in England. The new Tenants’ Fees Bill, as it will be known, seems likely to pass into law as all the main parties referenced similar proposals in their election manifestos.
As things stand, the average amount paid in fees per let property is currently £223 according to government figures, with around £4.3 million people paying such fees every year. Typically, these fees cover the costs incurred for reference taking, getting credit checks and investigating the immigration status of prospective tenants. If passed, the new bill will also allow tenants to recover any fees that have been charged unlawfully. What’s more, it could also introduce a cap on refundable security deposits, holding deposits and tenant default fees. All food for thought for property investors with a keen eye on maximizing their long term returns.
While the impact of the Bill obviously remains to be seen, it follows that some landlords may pass on the charges to tenants in the form of higher rents, a hypothesis that is echoed by ARLA Propertymark, the UK’s foremost professional body for letting agents. As such, the industry will no doubt be keeping a particularly keen eye on the bill’s progress over the coming months…