The Queen’s Speech, May 2021: Highlights for the social housing sector17/05/21
On Tuesday, the Queen set out the government’s legislative priorities for the year ahead, in what was her 67th opening of parliament. The Queen referenced several key pieces of legislation that will have a direct effect on the social housing sector:
- The Leasehold Reform (Ground Rents) Bill – will provide that leaseholders of new, long residential leases cannot be charged a financial ground rent for no tangible service
- The Planning Bill – will outline a simpler and quicker planning system
- The Building Safety Bill – will implement recommendations to improve building safety and to prevent a tragedy like Grenfell from occurring again
- The Charities Bill – will aim to give greater flexibility and reduce administrative and financial burdens.
In this insight we provide an overview of the key pieces of legislation, assessing the impact of each of these for registered providers.
The Leasehold Reform (Ground Rents) Bill
The Queen stated that the government’s main objectives in relation to housing would be to enable more people to own their own home whilst enhancing the rights of those who rent through the introduction of The Leasehold Reform (Ground Rents) Bill.
To help to make leasehold a more transparent and attractive form of homeownership, the government is legislating for ground rents in new residential long leases to have no financial burden for all future qualifying leases. Leaseholders won’t face unfair terms or significant ground rent for no tangible service.
The Planning Bill
The Queen confirmed that legislation will be brought forward to overhaul, modernise and speed up the planning system with the aim of enabling more homes to be built. The planning bill will provide for the creation of planning zones with areas designated for growth, protection or renewal. Growth areas will have current planning restrictions significantly lessened, with automatic outline planning permission granted for applications for new homes, while development will be more restricted in protection and renewal areas.
The Bill also contains proposals to do away with Section 106 Agreements and the Community Infrastructure Levy (CIL), replacing them with a single flat rate Infrastructure Levy. The new Infrastructure Levy will be a charge based on a fixed proportion of the final development value but it is not yet clear what the threshold for this will be.
Although this may speed up the planning process as time will no longer be spent in negotiating the Section 106 Agreements, there is concern that there will no longer be a requirement for developers to produce onsite affordable housing that is to the standard of market housing. Or will it simply be the case that a new mechanism to secure affordable housing will be put in place in lieu of s106?
The Building Safety Bill
With the intention of protecting future generations of homeowners, the government will be bringing forward legislation this year to tighten building safety regulation and to prevent future malpractice. The Bill is expected to categorise a further 13,000 buildings as higher risk as well as to provide for the creation of a new Building Safety Regulator. A new regulatory regime overseen by the Health and Safety Executive will be introduced in 2023 by the Bill to ensure that fire safety matters are incorporated at the planning stage for schemes involving a high-rise residential building.
The Bill will also establish a New Homes Ombudsman to simplify the process of logging complaints for tenants and will introduce a system of Accountable Persons and Duty holders who will be responsible for making and keeping a building safe.
Ensuring the health and safety of residents is paramount and so this Bill will be welcome to housing providers. The measures should help to restore confidence in this part of the housing market, ensuring that many of these homes will be safe to reside in.
The Charities Bill
The Queen announced that the Charities Bill would support the sector by reducing unnecessary bureaucracy. Several simplifications are included for the rules on disposing of property. A key change will be that instead of the requirement for a RICS qualified surveyor to produce a detailed report on the property, charities can take advice from several other professionals such as Fellows of the National Association of Estate Agents and Fellows of the Central Association of Agricultural Valuers. The report itself will also now be proportionate to the property, taking into account whether it is a small of strip of land or a complex development. This should help reduce administrative burdens and provide more flexibility in property disposals.
Other notable inclusions and omissions
There was a strong focus on the government’s priority of ‘levelling up’ with a number of measures aimed at improving national infrastructure. The High Speed Rail Bill will give new powers for the construction and operation of the next stage of HS2 between Crewe and Manchester, while the Product Security and Telecommunications Infrastructure Bill will provide for the extension of 5G mobile coverage and gigabit broadband across the UK. The enhanced connectivity may help to unlock new housing developments and increase demand for housing in rural areas in the years ahead.
A notable omission in the Queen’s speech was the lack of any mention of the Social Housing White Paper, which advocates better protection for tenants and greater transparency and accountability in the relationship between landlord and tenant.
There was disappointment and frustration from some leaseholders at the government’s slow progress in bringing forward the legislation almost three years after the Social Housing Green Paper was introduced, although the government has separately indicated that they will be looking to progress this as soon as practicable.
How can Capsticks help?
Capsticks provides truly national full-service support to over 200 registered providers (RPs) across the country. Our Housing & Regeneration team, one of the largest in the country, advises on all types of development transactions from forward funded schemes, section 106 developments and stock rationalisations to plot sales and general asset management work. We are experts on all aspects of planning law including s106 agreements, CIL advice, planning appeals, Compulsory Purchase Orders and all general planning law matters.
If you have any queries around what's discussed in this insight, or the spending review itself, and the impact on your organisation, please speak to Chimi Shakohoxha, Suzanne Smith or any of your contacts at Capsticks to find out more about how we can help.