Real estate sector braces for a Labour administration takeover
Labour's Impact on the Property Sector: A Shift Towards Tenant Protections and Commonhold Ownership
The property sector in the UK is currently undergoing significant changes, with the Labour government taking a proactive approach to reform the sector.
Strengthening Tenant Protections
In 2025, Labour introduced the Renters’ Rights Bill, aiming to enhance tenant security. The Bill seeks to abolish Section 21 no-fault evictions, end assured shorthold tenancies, and make all tenancies periodic (rolling) for new and existing tenancies in England. This move prevents landlords from easily evicting tenants and introduces more lasting tenant protections.
The Bill also limits rent increases and bans practices like rental bidding wars. Tenants gain rights such as keeping pets without landlord permission. Labour has also proposed extending restrictions on landlords using specific grounds for repossession related to selling the property, tightening the rules on when landlords can evict.
Shifting from Leasehold to Commonhold Ownership
Labour is moving to abolish leasehold sales for new flats, replacing them with a commonhold ownership structure. This reform is expected to reshape residential property ownership and impact large estate owners by fragmenting their control and complicating management.
Following the 2024 Leasehold and Freehold Reform Act, new measures make lease extensions cheaper and remove marriage value costs, impose zero ground rents, and increase transparency on service charges and insurance commissions. Further reforms are pending via a draft Leasehold and Commonhold Reform Bill planned for late 2025.
Impact on Brownfield Land Development
While Labour's policies on brownfield land conversions are less explicitly highlighted, broad reforms to development and property management could indirectly influence future brownfield development. Altering developer and landlord calculations could potentially affect development priorities and incentives for brownfield sites.
Implications for the Property Sector
The property sector, particularly the rental market, is experiencing changes. The median earnings for all landlords, excluding rental income, is just £24,000 per year, and their median age is 58. These figures suggest that many landlords are ordinary people, and any further negative impact on renting could lead to property sales.
The rental market is not short of stereotypes, with one of the biggest misconceptions being that all landlords are wealthy. However, the data suggests otherwise. The government's 2021 English Private Landlord Survey shows that 45% of individual landlords own just one buy-to-let property, with a further 40% owning between two and four properties.
As the General Election approaches, it remains to be seen how Labour's approach to property development will differ from that of the Tories, who have encouraged it by creating many new permitted development rights in England. The current government has realized that increasing taxation or regulation on landlords does not help the housing market.
In conclusion, under Labour, the property sector faces stronger tenant protections, tighter landlord eviction controls, a major shift from leasehold to commonhold in flat ownership, and ongoing leasehold reforms. While brownfield land targeting is less explicitly highlighted, broad reforms to development and property management could influence future brownfield development indirectly. The outcome of the election and the policies implemented will shape the future of the property sector in the UK.
These reforms demonstrate Labour's policy prioritization in housing, aiming to strengthen tenant protections and implement the shift from leasehold to commonhold ownership in the property sector.The proposed changes to the rental market, such as abolishing no-fault evictions and introducing commonhold ownership, could have significant implications for the property sector under Labour's general-news policies.*
