The West Country
UK Housing and Development: Consultations, Reviews and Proposed New Legislation
The UK housing market has seen a number of significant developments in recent months, with consultations, bills, and market studies all contributing to the ongoing debate about how best to address the country’s housing crisis. We have summarised some of the key developments below.
Competition and Market Authority Review
The CMA issued its final report on a market study into housebuilding in England, Scotland and Wales. The report highlights concerns in relation to the following areas:
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Too few homes being built in the area in which they are needed most which is having a negative effect on affordability. The report concludes that this is largely a result of:
Planning system taking too long and resulting in too much uncertainty; and
Speculative private development where housebuilders are only building what they know they can sell rather than what is required.
Estate management charges are too onerous on homeowners, in 2021-2022 80% of the new homes that were built by the 11 biggest housebuilders were subject to estate management charges. Build-quality of new homes.
The report concluded that substantial intervention in the housebuilding market is necessary to address the issues identified by the study and made the following recommendations to Government:
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Councils being required to adopt amenities on all new housing estate
Introducing enhanced consumer protections on existing privately managed estate
Establishing a New Homes Ombudsman so that homeowners can better pursue homebuilders over any quality issues they face Introducing measures to
increase build-out by incentivising builders to diversify the tenures and types of homes delivered
Measures being put in place that would result in significant increase in non-speculative house-building led by publicly funded projects previously led by councils and housing associations coupled with incentives on housebuilders to deliver homes at a faster rate.
Following the release of the report the CMA also launched a new Competition Act investigation into 8 housebuilders (Barratt, Bellway, The Berkeley Group, Bloor, Persimmon, Redrow, Taylor Wimpey and Vistry) in light of evidence that they may be sharing information with their competitors. It is estimated that this report will be released in December 2024.
We are waiting to see what the Government will do with these recommendations (if anything).
The full report can be read here: Housebuilding market study final report -
GOV.UK (
www.gov.uk)
Leasehold and Freehold Reform Bill
This bill has its first reading in the House of Lords and third reading in the House of Commons at the start of the month. The main focus of the bill is to increase rights for owners of long leasehold residential properties. The main impact for new housebuilding will be:
1. Leases of houses longer than 21 years will not be permitted 2. Extensive regulation in relation to service charge
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3. Making it easier for leaseholders to acquire the freehold interest and/or extend their leases.
This Bill is being pushed quickly through the various readings and therefore we anticipate that it will be fully enforceable before the general election.
Levelling up and Regeneration Act 2023
The Levelling up and Regeneration Act is a new piece of legislation which came into force in October 2023 with an aim of speeding up the planning system, holding developers to account and encouraging more councils to put in place plans to enable the building of new homes. Most of the provisions of the Act won’t come into force immediately as they will be subject to further regulations but the key impact of the Act:
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New infrastructure level to replace CIL – when it comes into force Councils will be obliged to impose the levy, currently some local authorities (i.e. Mendip, West Devon and South Hams) have chosen not to pursue CIL.
Registration of contractual control agreements – it will be compulsory to register any agreement which secures land for development in England or Wales (i.e. options, pre-emptions, conditional contracts and promotion agreements). It is proposed it will apply to agreements after 6 April 2026 and existing agreements entered into after 6 April 2021. Once the provisions are in force it will be necessary to provide information to the Land Registry within 60 days and the Land Registry will publish data to make it publicly and freely available.
A consultation is running until 20 March seeking views on the Government’s plans to impose additional transparency as detailed above. The consultation seeks views on providing a more transparent picture of controls on land through a freely accessible database and provides a draft set of regulations that would implement the provisions outlined above for comment.
The consultation can be accessed here but closes on 20 March Contractual controls on land: consultation -
GOV.UK (
www.gov.uk)
Restricting Ground Rents – Consultation
The Government has already abolished the charging of ground rents on new long residential leases but they have now launched a consultation on the various options to extend this to existing leaseholders. The consultation ran until 27 January 2024 and we await details of the report. It is, however, likely that we will see the Government look to impose limits of ground rents on all existing long residential leases which will impact on the freehold owners/investors of the properties.
General Election 2024
All of the above reports and consultations are against a backdrop of the anticipated general election. It remains to be seen whether the current Government will try to push through some of these proposals and recommendations before the election and if a Labour Government would utilise these consultations and Bills or look to start again.
COMMERCIAL PROPERTY MONTHLY 2024
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