At the state opening of parliament today, the King announced in his speech that renters will have ‘greater rights’ and draft legislation on leasehold and commonhold reforms – the property industry has expressed concerns over plans for housebuilding, but welcome reform.
MPs made their way to the House of Peers from the commons today to attend King Charles and Queen Camilla for the King’s second speech since being crowned monarch. Prime minister Keir Starmer could be seen walking next to former conservative prime minister Rishi Sunak and Chancellor Shabana Mahmood presented the King with the speech from a ceremonial purse. The King opened the speech by stating the new government will be ‘mission led’ and that ‘stability will be the cornerstone of economic policy, tax and spending changes’.
The King said in his speech:
“My government will provide legislation to give greater rights to people renting their homes, including ending no fault evictions and draft legislation will be published on leasehold and commonhold reform.
“We will get Britain building, with planning reform and accelerate delivery of high quality infrastructure and housing investment. There will also be investment in industry skills and new technology. There will be legislation on AI models, new powers to metro mayors and combined authorities, local growth plans with an economic benefit to communities.”
Industry professionals have said that ‘today is a big step forward for housing’. Greg Reed, Places for People’s Chief Executive Officer, said:
“Today is a big step forward for housing. I’m delighted to see Government immediately put housebuilding front and centre of its first King’s Speech, tackling many of the barriers that have been standing in our way for too long.
“As one of the UK’s leading affordable housebuilders with the biggest pipeline of any organisation in our sector, we stand ready to build at pace and scale with over 2,000 completions in train for 2024/25. But we want to and need to go even further and faster. We have written to the Secretary of State setting out how working with us can help the new Government realise its vision of delivering true change, and look forward to further conversations.
“Plans announced today will help unlock land, speed up the planning process and turbocharge housebuilding. But we need to see this in action. To really drive delivery of the right homes, in the right places, supported by the right infrastructure, local planning authorities need to provide their own local plans and only 22% of them have adopted one in the last five years. With hopes of interest rates being further cut next month fading, there’s no time to wait. The time to build is now.”
Chief Executive of the Council for Licensed Conveyancers Sheila Kumar, said:
“Leasehold reform and a reinvigoration of commonhold are both welcome inclusions in the King’s Speech, but the government has missed an opportunity to make further improvements to the homebuying and selling process by failing to introduce measures to regulate property agents. Regulation of estate agents and managing agents could be immensely helpful for improving the operation of the property market, making better use of housing stock, supporting growth and providing increased confidence to consumers. The CLC is working with key organisations across the sector to pave the way to a better home buying and selling process that will benefit the nation and the new Digital Information and Smart Data Bill should support that work further.”
Gillian Charlesworth, Chief Executive Officer of the Building Research Establishment (BRE), said:
“The King’s Speech, the first under this new government, is a speech designed for the built environment sector and shows the level of work required to rebuild Britain.
“Planning reform is not just necessary, but essential, if Labour is to deliver on its commitment to build 1.5 million new homes over the next five years as well the clean power system the country needs to reach net zero.
“Urging caution is also necessary: planning reform alone will not act as a magic remedy for all Britain’s building problems. We need better buildings as well as more buildings. We need to tackle the backlog of unhealthy existing homes and newly constructed properties unlocked by planning reform need to be fully sustainable and climate resilient.
“Empowering local and regional authorities is key. The English Devolution Bill, in conjunction with the Planning and Infrastructure Bill presents a great opportunity to unlock higher building standards while harnessing local economic growth
“Today’s King’s Speech underlines the scale of the challenge facing the new government. However, the announcement of 40 bills and draft legislation, nearly double that of the King’s speech in November 2023, shows a confident and ambitious new Government who understands what it will take to face down and overcome the challenges of today and the future. We support the ambition set out today and look forward to contributing to its future success.”
The director of a lease extension specialist says that more legislation is a ‘mixed blessing’ after the first King’s Speech last year promised a ‘draft’ leasehold and Commonhold reform bill in the upcoming parliamentary session.
Linz Darlington, MD of lease extensions specialists, Homehold said:
“In their first King’s Speech the new Labour Government have promised to provide a “draft” Leasehold and Commonhold Reform Bill in the upcoming parliamentary session – which will restrict new leasehold properties and reinvigorate commonhold.
“While this is good news for leaseholders generally, for those wanting to extend their leases or purchase their freeholds, yet more legislation is a mixed blessing. What these people need is the Labour Government to concentrate on implementing the Leasehold and Freehold Reform Act 2024, passed in the last parliament.
“While far from perfect, this Act could make it cheaper for some leaseholders to extend their leases. However, it currently offers absolutely no benefit to anyone – because it isn’t yet in force!
“In order for many provisions of the 2024 legislation to be commenced, there needs to be additional work done on this existing legislation – including setting the rates used to calculate whether lease extension prices will go up or down.
“Many leaseholders have their lives on hold because they have properties which they cannot sell or mortgage due to short leases. What these people need is the Labour Government to concentrate on implementing the 2024 legislation, before they get started on the next thing.
“The new draft bill could easily become a distraction from getting the existing law implemented. It is likely to rip up lots of the old legislation and start again. The Government might see investing in the work required to put this into force is the equivalent to installing a new kitchen in a house that they fully intend to knock down in a few short years.
“The word “Draft” in the title of the new bill is telling – this is not included in the title of most of the proposed pieces of legislation. This suggests that this new legislation won’t pass in this parliamentary session – so leaseholders could be left waiting for years to see the benefit of it.
“The Labour Government, in the briefing note for the King’s Speech, promise to “act quickly” and leaseholders certainly need them to implement the existing legislation without delay.”
The Residential Freehold Association welcomed Leasehold reform with Director Mick Platt saying:
“We await further details of the Government’s plans but welcome their recognition that there is more to be done to address the real concerns of leaseholders, such as rising service charges and the regulation of managing agents.
“While we support proposals to enact the Law Commission’s recommendations, the Government must ensure that any legislation does not retrospectively interfere with the legitimate investments of institutional investors, including professional freeholders and pension funds.
“The RFA looks forward to working with the Government to ensure proposals promote the highest standards of management across the sector, whilst protecting existing property rights.”
