The King’s Speech felt a lacklustre affair, and somewhat light in legislative heft, but that doesn’t mean it lacked any kick.
The housing sector might well feel otherwise – justifiably so – given there are only two items of direct relevance for the sector: the long-awaited Renters Reform Bill, and a Leasehold and Freehold Bill, but nothing about getting more genuinely affordable homes built.
As the King said in his speech: “My ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackling the exploitation of millions of homeowners through punitive service charges [Leasehold and Freehold Bill].
“Renters will benefit from stronger security of tenure and better value, while landlords will benefit from reforms to provide certainty that they can regain their properties when needed [Renters (Reform) Bill].”
But, no disrespect to the King, his words are but the ermined window dressing. Underneath the constitutional neutrality of the ceremony in the House of Lords, was the inevitable crackle of political energy.
Here’s the words – and the political framework of an administration – more a prime minister – that knows it’s running out of time – and on fumes. Then there’s an Opposition that smells the prospect of government office in the near future.
Despite Labour having said much on the matter of housing recently, it remains that the case that it’s a subject with only a tenuous presence in the political arena of Westminster. It has been ever-thus for some years.
On that note, responding to the King’s speech, Geeta Nanda, chief executive of G15-member Metropolitan Thames Valley Housing (MTVH), said housing is now a “key issue” for the major parties looking to form the next government.
“Tackling the housing crisis is one of the great challenges of our time and we desperately need a cohesive and coherent proposition, with realistic targets and a plan to execute these,” she added.
“Housing associations must be a part of this conversation – we share the aspiration for more affordable housing, and have the skills and expertise to deliver. What we need is a long-term housing strategy, investment, consultation, and a planning system which supports development of the affordable housing all communities need.
“A secure, affordable, and safe place to call home is a distant dream for too many people. As the next election approaches, our politicians have the chance to show they are serious about helping to deliver the secure, affordable homes which give people the chance to live well.”
Build back at all?
The chief executive of Bradford-based Manningham Housing Association criticised the government for failing to include a firm commitment in the King’s Speech to build more new affordable homes.
In a statement, Lee Bloomfield said the speech highlighted that taking homeless people off the streets was not a priority for ministers after Home Secretary Suella Braverman described homelessness as a “lifestyle choice.”
“The tone for the King’s Speech was set over the weekend when the home secretary defined homelessness as a ‘lifestyle choice’ and stated her desire to ban homeless people from sheltering in tents
“As such, no one should be shocked that taking more homeless people off the streets by building more affordable homes would be at the top of government’s policy agenda between now and the General Election.
“Community-based organisations such as Manningham Housing Associations simply wish to do the right thing for our tenants and, indeed, prospective tenants by expanding the number of properties we have available.
“But we cannot do this alone, the government must take the lead.
“The present administration stopped any pretense that building new homes was a priority when it ditched its target of building 300,000 homes every year, essentially casting housing associations and deprived neighbourhoods in places like Bradford and Keighley adrift.
“By doing so, it chose to snatch away opportunities for better lives that people of all ages living there deserve.
“The absence of any renewed commitment in the King’s Speech to build more new affordable homes is desperately disappointing but, in the wake of Suella Braverman’s crass and heartless comments, not in the least bit surprising.”
Reaction: Renters Reform Bill
Rachael Williamson, head of policy and external affairs at the Chartered Institute of Housing (CIH), said: “We’re pleased to see the government’s continued commitment to take forward a Renters Reform Bill in the next legislative programme, along with the introduction of a Leasehold and Freehold Bill.
“We have shared our feedback on these previously and will work with our members, partners, and government to seek to ensure they are as effective as possible in delivering the reforms needed.
“We now look to the government to use the forthcoming Autumn Statement to address the pressing issues facing many people with the rising cost of living – namely uprating local housing allowance, reforming the social security system, providing support with energy costs and efficiency, and increasing grant levels to provide much needed social homes.”
Councillor Darren Rodwell, housing spokesperson for the Local Government Association (LGA), said: “This Bill will help to achieve better standards in the private rented sector through increasing the rights of tenants, and enabling them to better hold landlords to account. It will also increase councils’ oversight of, and ability to enforce against the small minority of landlords guilty of criminal behaviour.
“The removal of ‘no fault’ evictions is a significant step towards tackling our national homelessness crisis. Whilst the LGA remains concerned by the delay to its implementation as a result of backlogs in the court system, we believe the government should consider publishing the evidence base for the delay and bring forward the abolition of Section 21 at pace.
“We also support measures that will enable councils to keep the proceeds of financial penalties to reinvest in enforcement activity. However, this funding won’t cover the costs of the new duties in the Bill or the scale of the proactive work that is needed to improve standards for tenants.
“We will continue to work with government to ensure that councils have the right powers, skills, capacity and resources to undertake effective enforcement activity. This includes removing the requirement for secretary of state approval for larger selective licensing schemes.”
Charlotte Cook, partner at Winckworth Sherwood, said: “When the Renters Reform Bill was initially published, it emerged with great endorsement from private and social housing landlords as well as a cross-party body of MPs.
“The reality is that scrupulous residential landlords will be meeting the Bill’s requirements anyway, and while registration with the scheme may be onerous, it sends a signal of professionalism and will protect against anti-social tenants.
“However, the Bill’s progress has stalled and there is a risk that this widespread support will wither away unless a number of barriers are dealt with.
“Court backlogs have been one of those barriers, and committing to delay reforms until eviction cases are cleared has eased concerns from MPs and landlords. However, it doesn’t deal with the ongoing problem over how future enforcement – this time for landlords – will be funded.
“With the Local Government Association predicting a staggering £2bn funding gap for all local authorities in England and Wales next year, the question remains as to how councils will be able find the resources to police these proposals rigorously.
“The sector needs certainty and urgency of how, and when, these proposals will be implemented to the benefit of all landlords and tenants.”
Reaction: Leasehold reform
Geeta Nanda, chief executive of Metropolitan Thames Valley Housing (MTVH), said: “The King’s speech is an indicator that the government is listening to our calls to give leaseholders greater security and to address additional costs.
“Home-ownership must be a stable and affordable choice. MTVH and SO Resi has laid the foundations for these new regulations, as we already offer 990-year leases with no ground rent to pay as standard and abolished the ‘marriage value’ where shared owners are looking to extend their leases.
“We implemented these reasonable and much needed measures long before today’s King’s Speech. The government’s reforms will bring the rest of the sector in line with the standards that have already been established by responsible freeholders.
“The leasehold system can greatly benefit leaseholders and help to address the complexities associated with managing large apartment blocks. A single responsible freeholder will have the knowledge and expertise to ensure the owner-occupier’s assets are protected and maintained, manage disputes and keep a strict budget.
“It is not always reasonable or possible for each and every occupant in a block of 100 flats to manage the freehold of a property, for example, and could lead to properties being mismanaged or becoming unsafe due to disputes over responsibility and upkeep.”
Mick Platt, director of the Residential Freehold Association (RFA), said: “We welcome reforms of the leasehold sector, which provide better quality, affordable and professionally managed housing, but the government must ensure that legitimate investments and property rights are respected.
“Retrospectively capping ground rents would be a totally unjustified interference with the legitimate property rights of freeholders and the pension holders who have invested in the sector. Even considering such proposals sends a very damaging signal to the institutions who see the UK as a stable and safe place to invest their money.
“These proposals would drive professional freeholders from the market, a move which the government’s own research suggests a majority of leaseholders are unlikely to be in favour of, given the consequences include greater responsibilities for the block stewardship and an increased cost burden being placed on residents. In fact, independent polling for the RFA has found that only 18% of current leaseholders would be comfortable assuming the legal obligations for managing their building.
“Consumer choice in the housing market must be maintained, and it’s critical the government consults with all industry stakeholders to ensure a leasehold reform Bill does not undermine property rights, impose unwanted obligations on consumers or delay the remediation of substandard buildings.”
John Stephenson, a partner at the law firm BDB Pitmans, said: “The proposed legislation will prevent residential developers selling houses on a leasehold basis – something most reputable developers have already stopped.
“The government’s estimates suggest that just 1% of new houses are sold on a leasehold basis, down from 15% in 2016, and with ground rents capped at a peppercorn on new builds since June last year. It is a classic case of shutting the stable door after the horse has bolted.
“The legislation is disappointing for those already owning a leasehold house. Unless they can afford to buy the freehold and thus extinguish the ground rent – which can be expensive – they may find themselves continuing to pay ground rent.
“That rate will be capped but the legislation is unclear at what rate and the Government may find itself having to compensate the owners of those ground rents. A consultation will follow shortly, but there is a very real risk legislation will fail to get onto the statute books before the end of this government’s term. There is no short-term respite.
“Flat owners – who make up 70% of the new homes market – can be forgiven for feeling short-changed. Whilst legislation will make it possible to extend their lease from the 90 years as now to 990 years and without having to wait for two years after purchase, they will see no other changes to their leasehold arrangements and many of the Law Commission’s recommendations, such as the abolition of marriage value, have been shelved, perhaps on Human Rights Act grounds.
“The promises of fundamental reform to the leasehold system appears to have lost much of its impetus, and that will disappoint all leasehold homeowners.”
Katherine Whittle, a senior associate at law firm Brabners, said: “Leasehold reform has long been overdue and represents a major step forward for homeowners.
“All new homes being freehold will remove the burden of ground rents, while leasehold owners will benefit from plans to extend terms from 90 to 990 years – with renegotiations often being a costly and lengthy exercise.
Plans to scrap the two-year ownership requirement also adds to other measures that will make buying or selling leasehold properties a less arduous process, increasing their market attractiveness as a result.
“Some landlords will be less enamoured with the proposed reforms, with a cap on ground rents disincentivising leasehold investments – however antiquated the system may be considered. They also face the increased risk of legal challenges from residents, with the Bill expected to transfer more power to occupants for determining service charges, which could create fertile ground for conflict.
“Ultimately, we anticipate the Bill’s good intentions will be warmly received and we think it is a positive step in the right direction for leaseholders. A fairer housing system can only foster a stronger sense of ownership and create more empowered local communities.”
On another note….
Louise Hutchins, head of policy and public affairs at UK Green Building Council (UKGBC), had a few words to say about the sustainability agenda.
“The government claimed to set out an agenda to tackle the long-term challenges facing the UK, yet introduced no legislation or proposals to address the catastrophic levels of energy waste from homes and buildings that are fuelling the cost of living and climate crises,” she said.
“Formally pulling the plug on minimum energy efficiency standards for private rented homes will condemn millions of people living in fuel poverty to continue enduring cold, mouldy homes.
“As we hurtle towards climate disaster, opening up new oil and gas extraction while failing to deal with the huge demand from gas heating in buildings will only take us further off-course from the net zero future we so desperately need.”
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