The King’s speech to open Parliament incorporated strong points on property and housing reforms, providing early indicators of the new Government’s approach to real estate and urban development. Here, Home Property Law Paralegal, Tom Jones looks at the proposed bills and what they mean for developers, tenants and landlords.
The speech underscored plans to streamline planning regulations, encourage sustainable building practices, and bolster protections for tenants. As prices for both homeowners and tenants continue to soar, these measures aim to create a more equitable housing market, fostering stability and growth. The address marks a significant step towards tackling long-standing issues within the property sector, promising transformative changes for communities nationwide.
Planning and Infrastructure Bill
At the heart of this bill are ambitious planning reforms designed to streamline the approval process for new housing projects and make it easier for developers to build new homes. One of the central elements of the bill is the simplification of planning regulations. By reducing the amount of red tape and accelerating decision-making, the aim is to facilitate the construction of affordable and sustainable homes.
Current figures show councils meet deadlines for minor applications in only 10% of cases, and then just the 1% of major applications. With a pre-election pledge to build 1.5 million homes over the next five years, this new Government is faced with an almighty challenge. They believe 300 new planners, along with a simplification of the process to grant consent to major infrastructure projects needed to supply vital services to new housing, will enable them to hit this target. The bill not only addresses the urgent need for more housing but also aligns with broader environmental goals with emphasis on sustainable development, with provisions for green building practices and infrastructure that supports a low-carbon future; so not only benefitting the environment but also lowering energy costs for tenants and owners alike.
Renters’ Rights Bill
Aimed at transforming the rental market and strengthening tenant protections, the bill reflects the government’s commitment to addressing continuing issues faced by renters, ensuring fairer and more secure housing for millions. Now this is not an entirely ‘new’ concept, as the previous Conservative government sought to introduce the Renters Reform Bill, but were unable to push this through prior to the General Election being called. As was widely discussed, the original bill was to abolish “no-fault” evictions under Section 21 of the Housing Act 1998, essentially preventing landlords from evicting tenants without a valid reason and offering renters greater stability and security in their homes.
The bill announced last week takes additional steps to provide further protections to tenants. The establishment of a national register of landlords will help to weed out unscrupulous landlords and bring about higher standards in the rental market. The annual growth rate in rents usually stands at around 2%, but in March 2024, the year increase in average rent hit 9%, therefore, measures to limit excessive rent increases by empowering tenants to challenge excessive rent increases designed to ‘force them out’ is likely to be welcome news to most. Those tenant powers are also to be extended to challenging inhabitable living conditions such as severe damp or mould and making homes safe, secure, and hazard-free, extending Awaab’s law from social to private landlords.
Through enhanced tenant protections, stricter landlord regulations, and measures to ensure affordability, we are potentially looking at a major overhaul of this sector.
Draft Leasehold and Commonhold Reform Bill
Extending on the Conservative’s Leasehold and Freehold Reform Act 2024, this bill brings the potential for significant changes, addressing critical issues in the leasehold system adopting the Law Commission’s recommendations on commonhold, enfranchisement (a purchase of the freehold by a collection of leaseholders), lease extensions and right to manage, in an attempt to create a fairer, more transparent housing market for property owners.
The bill aims to simplify the process for leaseholders to extend their leases. By capping the costs and reducing the complexities involved, the government wants to provide leaseholders greater control over their properties, ultimately reducing the financial burden that many face. This will also be strengthened by the ‘regulation of ground rents’. Now, as this is only a draft bill at this stage, we have no clearer picture than that. The previous government were in discussions to cap ground rents, we may, however, be looking at the removal of them altogether.
This is a strong possibility, given that the draft as it stands, bans the sale of new leaseholds, introducing commonhold as the second main tenure alongside freehold. Commonhold is a form of ownership where residents collectively own and manage the building in which their properties are contained. This model offers a more democratic and transparent way of property ownership, promoting better management and reducing disputes among residents. However, given there are still only around 20 commonhold blocks in the country, there certainly is a long road ahead before we see any notable change in this regard.
