Queen’s Speech – Implications for the Property Market

The UK Government announced their plans for the next parliamentary session in the Queen’s speech today which includes several significant proposals to change planning rules, introduce a new Building Safety Regulator, reform ground rents and explore the next steps for Renters Reform.

End to ground rents confirmed – England and Wales
Confirmation of a leasehold reform Bill that will put an end to ground rents, as per the announcement from the Housing Secretary, Robert Jenrick, earlier in the year.

Propertymark*, the go-to organisation for any questions pertaining to property and dedicated to promoting the highest industry standards, have campaigned for years for changes to the leasehold system to resolve the issue of escalating ground rent. They have responded to multiple consultations and in 2018 their research Leasehold: A Life Sentence found that 46 per cent of leasehold house owners were unaware of the escalating ground rent when they purchased their property.

Today’s confirmation is a step in the right direction, however, Propertymark is encouraging the UK Government to extend this to those who already own a leasehold property, as well as all retirement properties, to create a level playing field.

New Building Safety Regulator
As part of the Building Safety Bill, the UK Government intend to establish a new regulator for building safety along with substantial reforms to the UK’s building safety regime. A draft Building Safety Bill has already had pre-legislative scrutiny. It was included in the 2019 Queen’s Speech and published in draft form last July. In September last year Propertymark highlighted concerns with the proposals, including the role of estate and letting agents when buying, selling and renting property, material information and the remediation of any unsafe cladding.

Planning reform and homeownership
Another key area is a new Planning Bill, which aims to simplify and speed up the planning process in England, while making it harder for homeowners to block new housing schemes.

With the recent repeated months of record-breaking activity, there is a severe lack of housing stock, simplifying the planning process and increasing the amount of house building will be a welcome answer to this growing problem, however it must be used effectively at a local level.

“A greater supply of homes will serve to correct the imbalance between supply and demand which has been intensified by the stamp duty holiday. The government has made a number of announcements in the past on simplifying the planning process, however this will only work if it really reflects local needs and demands.

We hope the Planning Bill outlined today encourages the development of housing in more affordable areas, as at the moment, most of the development taking place is in areas that are unaffordable to first-time and lower income buyers.”

Mark Hayward,
Chief Policy Advisor, Propertymark

Renters’ Reform – England
The UK Government’s consultation response on reforming tenancy law to abolish Section 21 will be published later this year, along with their proposals on the ‘lifetime’ tenancy deposit scheme.

The UK Government will publish a Renters Reform White Paper in the Autumn demonstrates that Ministers are prepared to engage with the industry to understand the impact any substantial legislative changes will have on those involved in the private rented sector.

Propertymark will be engaging with MHCLG and MPs to ensure they fully understand the consequences of any changes. They will also be scrutinising the White Paper and proposed legislation, to ensure the best possible outcome for members.

“With the focus of the new package on lifetime deposits, landlord redress and greater enforcement, the UK Government must look at ensuring that a system that would allow deposits to be passported can only take place if there is a bridging loan, with the UK Government as the guarantor, in order to ensure the remaining part of the deposit is covered should the tenant default. Additionally, the UK Government must prevent ‘double jeopardy’ and only extend redress membership to properties that are fully managed.”

Timothy Douglas,
Policy and Campaigns Manager, Propertymark

Further details about the UK Government’s agenda as set out in the Queen’s Speech can be found here.

*Perry Bishop is Propertymark protected