In this edition we look at an imminent deadline for the registration of higher-risk residential buildings; the current state of play on proposed reforms to the residential private rented sector and to the regulation of social housing; and the impact of the 2024 Dutch Tax Plan on the real estate sector.
Register of higher-risk residential buildings: registration deadline imminent
As mentioned in our April 2023 Real Estate Focus, new regulations in force on April 6, 2023 impose a requirement to register higher-risk residential buildings with the new Building Safety Regulator (BSR). Registration is part of the wide-ranging new building safety regime introduced by the Building Safety Act 2022.
Existing higher-risk residential buildings that are occupied, or could be occupied, must be registered in the new BSR register by September 30, 2023. After that date, it is an offence if a building is occupied but not registered. Additional key information must also be provided withing 28 days of the initial application for registration.
New higher-risk buildings completed after October 1, 2023 must (amongst other things) be issued with a completion certificate by the BSR and be registered in the BSR register before the building is occupied. Again, a failure to comply is a criminal offence.
A higher-risk residential building is defined for these purposes as a structure that has at least seven floors or is at least 18 metres in height and has at least two residential units. A building will qualify as a higher-risk building for these purposes if it complies with this definition even if it is not exclusively residential. There are some exemptions from registration, including any building used entirely as a care home, secure residential institution, hospital or hotel.
Legal responsibility for registration rests with the “principal accountable person”, being the person or organisation (such as a housing association, local authority or company) that owns or is accountable for the building’s safety and responsible for maintaining its structure and common parts. For further information about accountable persons, please see our briefing here.
The register and accompanying guidance are available online: https://www.gov.uk/guidance/register-a-high-rise-residential-building.
“Landmark” reforms in the residential private rented sector: are they on hold?
As reported in our May 2023 edition of Real Estate Focus, the much-heralded Renters (Reform) Bill was introduced to Parliament on May 17, 2023.
The objective of the Bill is to “ensure private renters have access to a secure and decent home and that landlords retain the confidence to repossess their properties where they have good reason to”.
As drafted, the objective of the Bill is to be achieved through several key measures, including:
- abolishing section 21 ‘no fault’ evictions;
- abolishing fixed term tenancies and introducing a single system of periodic tenancies. Tenants will need to provide two months’ notice to end a tenancy and landlords will only be able to evict a tenant in prescribed circumstances;
- reforming the grounds for possession to make it easier for landlords to repossess their properties in certain circumstances. There are new grounds for possession, including where a landlord wishes to sell their property or for repeated serious rent arrears. Existing grounds are also extended;
- providing that landlords can only raise rents annually to market prices, with two months’ notice of any change;
- enabling the government to establish redress schemes which private landlords will be required to join; and
- introducing a Private Rented Sector Database to which landlords must sign up and register all the properties they let out.
Since their introduction, the proposals have proved highly controversial, with many organisations seeing them as an opportunity “to finally fix private renting”, and others of the view that they would trigger an exodus of landlords from a market that is already short of rental properties. That controversy may be the reason why the progress of the Bill has been surprisingly slow - the Bill has not yet had its second reading in the House of Commons and there has been recent speculation in the press that it has been “put on ice”.
So what next? We are unlikely to learn more before the King’s Speech on November 7 2023. Renters reforms, first proposed in 2019, still seem a long way off, which will no doubt be welcomed by landlords in the private rented sector.
Reforms to the regulation of social housing start to bite
As previously reported, The Social Housing (Regulation) Bill received Royal Assent on July 20, 2023 and is intended to establish a new approach to regulating social housing landlords. The overarching aim is to “reform the regulatory regime to drive significant change in landlord behaviour to focus on the needs of their tenants and ensure landlords are held to account for their performance”.
The Act seeks to achieve that aim through three core objectives:
- To facilitate a new, proactive consumer regulation regime, with a focus on safety, transparency and tenant engagement;
- To refine the existing economic regulatory regime, ensuring that providers are well governed and financially viable; and
- To strengthen the enforcement powers of the Regulator of Social Housing, including powers to carry out regular inspections of the largest social housing providers and to issue unlimited fines to “rogue” landlords.
Implementation has just begun, with the first commencement regulations bringing parts of the Act into force on September 20, 2023. These include:
- the first of the wide-ranging changes to be made to the existing regulatory regime, including the imposition of an implied term requiring registered providers of social housing to comply with prescribed requirements about the remedying of hazards; and
- provisions giving the Regulator of Social Housing powers to set new standards.
The Regulator has already launched a consultation seeking views on new consumer standards that registered providers will be expected to achieve from April 2024. The deadline for responses is October 17, 2023.
The 2024 Dutch Tax Plan: impact on the real estate sector
On September 19, 2023, the Dutch Ministry of Finance published its 2024 Tax Plan (Belastingplan 2024). The Plan includes several changes for 2024/2025 that will affect real estate investors.
If you invest in Dutch real estate or are otherwise interested in the Dutch real estate market and would like further details, please see our briefing on the topic.