The announcements made by Prince Charles in the Queen’s Speech this month included several matters that will affect the property market.
Planning
The government has formally dropped its plans for a separate bill to reform England’s planning rules. The new Levelling Up and Regeneration Bill, one of 38 new bills announced, will instead incorporate these changes.
The government says this will give communities a “louder voice, making sure developments are beautiful, green and accompanied by new infrastructure and affordable housing.”
Michael Gove confirmed that the bill will include design codes and give communities a vote on local development. The government says this approach will simplify the local plan process to make them “quicker and easier for communities to influence”, improving “outcomes for our natural environment by introducing a new approach to environmental assessment in our planning system.”
Street votes would give local people the power to set their own development rules. Under the plans, whichever figure is the higher or 20% of residents or ten home owners could request a referendum on the design code for their street from their local council.
The design code could include a determinisation of the size, height and style of new properties, as well as a say in any home extensions. The support of 60% of residents would be needed to determine planning permission. Good news for the NIMBYs, although it is estimated that currently just 3% of local people currently engage with planning consultants on planning applications.
The Strategic Land Group has said that “focusing on beauty” by introducing design codes and street votes will not appease local objections which “stem from a very human fear of change”. While agreeing that street votes are worth taking into consideration, it is not thought that it will result in more new properties being built, which are far more likely to materialise by planning to build more homes.
Housing provider, Abri, welcomed the introduction of the Levelling Up and Regeneration Bill, as it gave powers to local leaders to revitalise communities. It said that “thriving and sustainable communities” could be created through “strong local partnerships and a focus on delivering empowerment activities” and that, crucially, housing providers were part of the government’s levelling up targets. Incentivising the building of social housing would be key to positive change in this sector, the company said, and it hoped that the replacement of section 106 with a build levy would be used to provide more social housing.
Land agents criticised the lack of planning reforms in the Queen’s Speech, saying that this was a missed opportunity to level up and that despite saying the right things, little action was being taken.
House Building Targets
Robert Jenrick has sought to make local housing targets legally binding, but it is likely that other methods will be introduced to assess local housing need.
Michael Gove said that everything possible would be done to reach the 300,000 new homes a year promise made by the Conservative government in its election manifesto. However, he has since said that the government would not be “tied to a procrustean bed” (an arbitrary target) and that providing homes of poor quality, that don’t contribute to “beautiful communities”, lack infrastructure or are built in places where they are not needed, would be “no kind of success”.
Housing developer, Woolbro Group, said that dropping the 300,000 new homes target would not “resonate well with voters in the future”, despite bringing cheer to those against development in Tory constituencies. Home ownership for first time buyers would be even less achieveable, thanks to the rising costs of building and the imminent end of the Help to Buy scheme. The company described the UK’s planning system as “over-politicised”, and said that the government had chosen to make the system even more political by allowing residents to “veto local plans”.
The company called for a “new, independent body of planning experts who can set housing targets and review planning applications objectively and without bias.”
Landlords
Plans to revive town centres were announced, forcing landlords of high street shops to rent out their property if it had been empty for more than a year, described by Michael Gove as a “scourge of boarded-up shops”.
It is estimated that one in seven shops on the average high street is currently unoccupied, and one in five in the North East of England. Following years of high rents and business rates, the high street has lost multiple shops over the pandemic period when businesses were forced to close.
The Levelling Up and Regeneration Bill will give powers over compulsory rental auctions for derelict properties to local councils, who will be able to auction shops left empty for a year for commercial rent. Councils will also be able to make a compulsory purchase order on derelict buildings for the benefit of communities, perhaps including social enterprise projects or housing.
In addition, new legislation is expected to allow pubs and restaurants to continue indefinitely the temporary use of pavements for al fresco dining, that was introduced during the pandemic.
The prime minister said rejuvenating town centres would turn communities into “vibrant places to live”, while “restoring neighbourhood pride” within local communities, and creating new jobs and infrastructure.
Business Rates
The government announced temporary business rates relief of £1.7 billion from 2022/23 for up to 400,000 retail, hospitality and leisure properties on the high street.
Section 106 Scrapped
Section 106 is a legal agreement between the local planning authority and an applicant seeking planning permission, and will be replaced by a community infrastructure levy for local authorities: a “locally set, non-negotiable levy to deliver the infrastructure that communities need”.
Section 106 has been a major source of affordable housing, and almost 24,500 such homes were delivered in 2020/21 under the scheme. The government says making the change will give more control to local councils, providing more say over where and how funding is spent in the local area. No clarification has yet been made over whether levies will be set nationally or locally.
The changes will leave local authorities responsible for providing community infrastructure themselves, including affordable housing.