Queen’s Speech 2022 – What’s in and what’s out for property?
We look at the key items on the agenda for property which will be pushed through Parliament over the next year or so.
5 minutes to read
A wide-ranging set of 38 pieces of legislation were announced in the Queen’s Speech today, up from 30 last year, as Boris Johnson sought to reboot his premiership.
So, what laws can we expect ministers to pass in the coming year that will impact the property market? Below are the key ins and outs.
IN:
Levelling up and regeneration bill
A bill to give effect to a white paper published in February which aims to tackle geographical inequality across the UK. For property, it includes measures such as 'street votes' on 'local design codes' to allow residents to decide what sort of new buildings should be allowed in their area.
Landlords in England will also be forced to let empty shops in a bid to rejuvenate high streets. Under the move, buildings left vacant for a year would have to be entered into a ‘rental auction’.
In a briefing document released by Downing Street shortly after the speech was delivered, the government also confirmed the bill will include a “new approach” to environmental assessments, bring in a “locally-set non-negotiable levy” to deliver local infrastructure and simplify the process for creating local plans.
The new levy could replace the section 106 rules that force developers to build a certain proportion of affordable homes on their schemes.
Energy bill
This piece of legislation is aimed at continuing the transition towards net zero carbon emissions, as well as implementing the new energy security strategy published in April which focused heavily on UK wind, solar and nuclear power.
The net zero transition will continue to have ramifications for the way the property industry builds out and heats new buildings and retrofits existing stock for years to come. Already, from June 15th 2022, new building regulations come into effect that mandate that all new homes cut their emissions by 30%, and include new requirements to prevent the risk of domestic overheating, adding to existing build cost pressures.
Reaction: David Goatman, head of energy, sustainability and natural resources, EMEA, Knight Frank
“Energy is at a point of intersection of so many different policy areas at the moment: it’s security, cost of living, low carbon transition, infrastructure reinforcement. All of these things are coming together so it’s understandable they’re bringing forward a new bill but the challenges around energy are absolutely huge. The energy cost increases are huge and you put that together with very limited investment historically into the energy grid and a really slow planning process and you don’t have a great recipe for energy infrastructure in the country.”
“Developers know how to build very thermally efficient properties but if you can’t put a boiler in then you have to go with new technology and there’s a new cost to that. The government has been pushing people in the direction of heat pumps, much bigger heat pumps. That‘s an electrification technology so what do you do with the gas grid? I think developers are understandably asking a lot of questions.”
Renters’ reform bill
Reform of the private rented sector in England has been on the cards for a while now. The speech included legislation to end ‘no-fault’ evictions by repealing section 21 of the Housing Act 1988, which is seen as a cause of homelessness. The aim is to give tenants greater security of tenure, while ensuring landlords’ rights are not unfairly compromised.
Reaction: Jon Reynolds, regional lettings partner for North, City & East London, Knight Frank
The big question for me is how they do this. If it is done in the right way, we would welcome the changes. But you could also have fewer properties coming to market and less choice for tenants. I welcome the extra protections for tenants as it is already a challenging and competitive market at the moment for them, but reforms need to be well thought-through and introduced. Otherwise, it could be another factor that puts off landlords renting their property out, causing market supply to tighten further. If landlords want to sell in six to 12 months' time, knowing the court process will be different going forward, it might put them off. It could also deter new investors from the market.
Social housing regulation bill
Regulator to intervene if landlords underperform on decency of homes or handling of complaints. They will carry out inspections, ensuring quality accommodation.
New ‘Satisfaction Measures’ will allow tenants to see how their landlord compares to others.
OUT:
Planning rules overhaul
Ministers had paved the way for the biggest shake-up in planning laws for generations, but comprehensive reform was shelved following a backlash from rural Conservative voters.
Reaction: Stuart Baillie, head of planning, Knight Frank
“On the one hand I was excited about the reforms proposed back in 2020, there was a lot of good and fresh thinking coming forward, including from people outside the industry. Unfortunately, it does seem most of those ideas have been thrown in the scrap heap: zoning, accelerated planning, and depoliticising the planning system.
“There was very little in the speech itself on this, but Michael Gove was also talking over the weekend about housing targets perhaps being less of a priority and that’s a worry to me. We have massive housing needs in this country and the carrot and stick approach of trying to encourage authorities to deliver housing with targets has perhaps not been effective because planning policy has not caught up with it, but it was certainly an understood principle and allowed things to go forward so to back away from that approach feels like a retrograde step. We need to be careful too about introducing new layers of local approval on matters of design and affordable housing which could further stifle rather than stimulate development.”
Second home crackdown
In the run up to the Queen’s Speech the government had been expected to announce a new crackdown on second homes but so far no concrete details have emerged.
It had been widely speculated in the media that councils would be handed discretionary powers to increase council tax by 100% on second homes that are neither used nor let out by their owners for at least 70 days per year, in a bid to contain price inflation in picturesque areas.
Find out more
For more watch out for the next episode of Intelligence Talks this Friday where Stuart Baillie and David Goatman will unpack what the Queen’s Speech means for property in more detail, focusing on net zero, regeneration and planning reform.