What property reforms are coming up for the English social housing sector in 2025?

Although the prime focus of this Bill is to reform the private rented sector, registered providers of social housing (RPs) will be affected by the following changes:

The end of assured shorthold and fixed term tenancies

Once the Bill has been enacted into law, all tenancies will be assured periodic tenancies. This will mean the Regulator of Social Housing's (RSH) Tenancy Standard (which currently allows the use of fixed terms) will need an update. Most general needs housing is already let on assured tenancies, but the change will affect how RPs handle starter tenancies and demoted tenancies to tackle anti-social behaviour.

Tenancies over 7 years won't be assured tenancies

This means that a shared ownership lease won't be an assured tenancy and will be treated only as a long lease, so RPs will not have the current grounds for possession under the Housing Act 1988. RPs will be able to recover possession using breach of covenant and forfeiture. There are protections against forfeiture, and we are also expecting forfeiture reform.

There will be further changes to the grounds for possession
    
These include:

• new ground for RPs after a Rent to Buy agreement comes to an end
• new ground for RPs for possession of temporary alternative accommodation used during redevelopment
• change to Ground 2 (sale by mortgagee) - the mortgage will no longer need to have started before the beginning of the tenancy, but the notice period will be increased from 2 to 4 months
• new grounds for superior leases, supported accommodation, temporary accommodation and stepping stone accommodation
• rent arrears threshold will be raised to 3 months

Not all reforms in the Bill affect social housing

Some of the changes which have caught the media's attention will not apply to social housing, including:

• new rule restricting rent increases which can only be made under the 'section 13 procedure' with 2 months' notice
• new pet policy (where landlords will not be able to unreasonably refuse permission to keep pets)
• registration on a new digital database
• mandatory membership with a new Ombudsman
• use of the new mandatory ground for possession for sale of a dwelling house

When will the changes come into force?

The Bill is now in the House of Lords for consideration. The Government is aiming for implementation by Summer 2025, but this timing seems optimistic given the need for court reform and publication of secondary legislation before the changes could take effect.

In a written statement on 21 November 2024, Matthew Pennycook announced the Government's timetable for implementation of property reforms which will affect the residential sector (and not just social housing)

Lease extensions and enfranchisement

These reforms include the abolition of the two-year rule for lease extensions and enfranchisement, which came into effect on 31 January 2025 (subject to certain transitional provisions). This means leaseholders will no longer have to wait 2 years after purchasing their property before exercising rights to extend their lease or buy their freehold.

Consultations, White Papers and other reforms

Pennycook's statement also signposted further changes, including:

• consultations on:
  • service charges and costs in 2025
  • valuation rates for enfranchisement premiums in Summer 2025
  • consumer protections in 2025
  • ending the "injustice of fleecehold" on private estates
  • approach to banning new leasehold flats (the ban on leasehold houses is in the Leasehold and Freehold Reform Act 2024, but not yet in force)
  • consultation requirements before major works can be recharged in service charges
• a White Paper on commonhold in early 2025
• other property reforms including:
  • "coherent package" of Right to Manage reforms expected in Spring 2025
  • draft Leasehold and Commonhold Reform Bill expected in the second half of 2025 to cover ground rents and forfeiture
  • the remaining provisions of Leasehold and Freehold Reform Act 2024 to be implemented, but these would be dealt with by way of reforms to the existing legislation

We also await:

• the introduction of Awaab's Law
• a consultation on the Decent Homes Standard
• the final details of the new RSH Competence and Conduct Standard (requiring qualifications for some social housing managers)
• energy performance certificate reform; and
• reform of the Co-operative and Community Benefit Societies Act 2014