This morning, King Charles made his first speech to open Parliament, outlining the key pieces of reform and legislation we can expect to see across the next year. From Leasehold and Freehold Reform to enforcement of Building Safety Act 2022, smoking bans to Netflix subscriptions, prison sentences to self-driving cars: the monarch discussed a number of topics during his first speech to parliament. But how will these topics impact the UK property market in 2024?
Here’s a quick summary of everything covered in the King’s speech to parliament:
As the King opened his speech to parliament, he made reference to perhaps the most important topic on many of our minds – the cost of living crisis. King Charles stated that his government will work hard to “bring down inflation, to ease the cost of living for families and help businesses fund new jobs and investment” – but how does this impact the property market? In short, a reduction in inflation will lead to an eventual downturn in the Bank of England base rate, which will make mortgages more affordable for existing and searching home owners, proving of course that housing supply can be grown.
During his speech, the King made reference to improving opportunities for leaseholders in the form of a proposed “Leasehold and Freehold Bill”. Whilst no consultations or dates were set, the proposed leasehold reform would build on the Leasehold Reform (Ground Rents) of 2022 and involve tackling hefty service charges, and making it simpler for property owners to purchase their freeholds or extend their leases.
The new Leasehold and Freehold bill aims to make leases far longer, and will introduce peppercorn ground rents whilst also banning the creation of new leasehold houses. The plans also include a proposed change to mixed use residential and commercial buildings by increasing the current 25% limit on mixed use developments to 50%, effectively enabling leaseholders in many more mixed use building to purchase their freehold or take over the management of their building. The bill is also set to change a number of other areas relating to consumer rights and “rules of engagement” with increased transparency, presumptive legal costs and a further focus on redress schemes. However, many believe that this Leasehold Reform is simply not enough to have an impact – especially on flat owners – with a report from Commonhold Now calling the proposals “insultingly modest”.
Speaking of property reform, the Renter’s Reform Bill was also featured in the King’s speech to parliament. The bill received its second hearing through parliament just a matter of weeks ago, and experienced a number of edits, namely when it came to Section 21 No Fault Evictions. Now, the government seems keen to enact court reforms prior to abolishing Section 21 – likely as a result of strong landlord retaliation.
Although Section 21 seems to be delayed, other key aspects of the bill remain strong, such as removing discrimination against tenants with pets, the creation of a new Ombudsman, and the introduction of periodic tenancies as standard. You can find out more about the upcoming Renter’s Reform Bill here.
As anticipated, the King made a reference to Rishi Sunak’s decision to scrap the northern leg of HS2. The monarch stated that the government will instead be funnelling these investment funds back into the north and into “improving the journeys that people make most often”. He also placed an emphasis on providing faster and more reliable journeys for those in the Midlands and the North who have now missed out on the benefits promised to them by the now-redundant HS2 North. You can find out more about what will be replacing the Northern portion of HS2 here.
There was also a draft bill that was announced regarding the importance of the British rail network – the Draft Rail Reform Bill. The only draft bill in the government notes, this rail reform bill has been in discussion for quite some time, promising to create a new Great British Railway agency to handle much-needed reforms to rail travel. There will be an emphasis on improving pricing, managing private franchises, and ensuring that trains are punctual. Should this draft bill pass, it will accompany the broader Network North plans to create a more reliable, better connected Britain, thereby connecting underserviced towns with larger cities and distributing opportunity across the UK. Of course, this will have a great impact on the housing market, making small villages and towns more viable locations for commuters to live in, taking pressure away from large cities.
The first King’s speech to parliament has presented a clear vision for the future, especially as it pertains to the UK property market. With upcoming rental reform, amends to leasehold regulations, and measures to tackle economic uncertainty, the future of the UK property market certainly looks bright. Want to keep up to date with all of the latest property news and updates? Be sure to give Centrick a follow on Facebook and Instagram, and check back at our News and Insights for regular property updates you won’t want to miss.
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