Share Article: Labour’s Manifesto – Key Property Pledges

Post By: Lida Nguyen and Mira Arezina

With the General Election on 4 July 2024 drawing near, we explain three key pledges from Labour’s Manifesto in relation to the property sector.

 Abolishing section 21 ‘no fault’ notices

A section 21 notice is served to bring a tenant’s Assured Shorthold Tenancy (“AST”) to an end.  This notice must give a determination date of no less than 6 months from the date that it is served, and it can be no earlier than the fixed term within the AST.  If the tenant fails to vacate, the landlord can issue proceedings for possession.  No reasons need to be given for bringing the AST to an end, hence why it is often referred to as a ‘no fault notice’.  Labour proposes to immediately abolish the use of section 21 notices in order to give tenants in the private rental sector more security.

Introducing a permanent comprehensive mortgage guarantee scheme to support first-time buyers who struggle to save for a large deposit with lower mortgage costs

1.5 million more homes would be built to give young people first choice on the new housing developments and help them get onto the property ladder.

Labour says a Freedom to Buy Scheme would be introduced to help prospective homeowners save for a large deposit and that it will work with lenders and the property industry to encourage uptake of the scheme so that they are able to confidently offer it to prospective buyers.

 Bringing the leasehold system to an end

Labour would enact the Law Commission’s proposals on leasehold enfranchisement, right to manage and commonhold.

  • Leasehold enfranchisement is when an owner of leasehold property extends their lease or, with other leasehold owners, collectively purchases the freehold.
  • Right to Manage allows some leasehold property owners to take over management of a building.  The landlord’s agreement is not required.
  • Commonhold is a form of ownership for multi-occupancy developments whereby each unit-holder owns the freehold of their home and a commonhold or residents’ association owns and manages the common parts of the property.

The reforms proposed by the Law Commission involve laying the foundations for homes to be owned as freehold and addressing existing issues for leaseholders. For example, if flats are sold as commonhold the right for leaseholders to extend their lease; purchase their freehold; or take over the management of their block of flats (right to manage) becomes redundant because the flats will have already been sold as freehold.

Labour proposes to:

(a)          ban new leasehold flats.  Note: The Leasehold and Freehold Reform Act 2024 bans the grant or assignment of leasehold houses (as opposed to flats) with the exception of certain long leasehold houses such as those where the superior leasehold was granted before 22 December 2017.  This part of the Act is yet to come into force; and

(b)          ensure commonhold is the default tenure.

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