The King’s speech laid out legislation supporting Number 10’s promise to “build more housing and infrastructure.”
A lot was covered during the King’s speech as the new government announced a “mission-led” initiative to boost economic growth and create jobs. In just 12 minutes, 35 new bills were introduced, potentially marking the biggest surge in the construction sector in decades.
Key Proposals
The government promised to ensure stability and boost economic growth, along with building “a new relationship with business and working people.”
While this is welcome news for businesses that have struggled through over a decade of uncertainty, there are still questions about where the people, funding, and materials will come from to achieve these ambitious plans.
Labour’s proposals covered:
- Planning and infrastructure
- A new industrial strategy council
- Employment rights and equal pay
- Reform of the apprenticeship levy
- Duty for mayors and government to collaborate.
During his speech, the King said, “Ministers will get Britain building, including through planning reform, as they seek to accelerate the delivery of high-quality infrastructure and housing. They will also pursue sustainable growth by encouraging investment in industry, skills and new technologies”.
Commercial Property
Labour wants to make the planning system more efficient, focusing mainly on housing rather than commercial real estate. Adding one planning officer per local authority might not make a huge difference.
However, the plan still relies on the private sector for support, with UK pension funds being considered as a potential source of long-term infrastructure investment. It’s not a new idea, but if done right, it could be very promising.
Labour also plans to ease planning policies to help build new data centres. This includes classifying them as nationally significant infrastructure projects, which means ministers, not local councils, will make the planning decisions. This move aims to sidestep local opposition, especially for data centres proposed on green belt land.
Environmental Considerations
Even though earlier spending promises have been scaled back, the commitment to net-zero is still strong, with private capital playing a key role. The UK aims to become a green finance hub, requiring banks, asset managers, pension funds, insurers, and FTSE 100 companies to have solid transition plans.
Upgrading energy infrastructure will be essential. Labour’s renewable energy targets call for wind and solar capacity to double, or even quadruple, in the next six years. They also propose stricter energy efficiency standards for private rental properties by 2030, though the exact levels aren’t specified.
The new government plans to require UK-regulated financial institutions and FTSE 100 companies to create and implement transition plans aligned with the Paris Agreement’s 1.5°C goal. This aligns with the EU’s Corporate Sustainability Due Diligence directive. For commercial property, this could mean more stringent ESG-related checks on lending and tougher criteria or penalties for inefficient assets.
Planning and Housing
Labour announced that they will be introducing a Planning and Infrastructure Bill, with the hope that it will:
- Streamline the delivery of critical infrastructure.
- Simplify approvals for major infrastructure projects.
- Introduce updated National Policy Statements on infrastructure.
- Reform compensation rules for compulsory purchases.
- Boost the capacity of local planning authorities.
- Use development funds to support nature recovery.
The government plans to use new developments to shift the market towards more efficient ways of working, aiming to boost output.
Freedom to Buy Scheme
One of Labour’s main housing policies is the Freedom to Buy scheme. They’ve promised to help 80,000 young people buy homes over the next five years by making the current mortgage guarantee scheme permanent, which is set to expire in June 2025.
Similar to the existing scheme, Labour plans to encourage lenders to offer high loan-to-value (LTV) mortgages by acting as a guarantor for first-time buyers who can’t afford a large deposit.
Stamp Duty Changes
Labour intends to increase the already higher stamp duty rate on purchases of residential property by non-UK residents by 1%.
It has also pledged to continue Tory plans to scrap non-dom status. This may deter foreign investment but could boost domestic supply and demand.
House building
Last year, the Conservatives got rid of mandatory targets, but Labour has promised to build 1.5 million new homes. This could increase supply and help lower prices.
Of course, this depends on the government being able to navigate green belt issues and strict planning departments.
Renters
The government is planning to introduce a Renters’ Rights Bill to give more rights and protections to people renting their homes.
One major change is the end of Section 21 no-fault evictions. Currently, landlords can issue a Section 21 notice without giving a reason, leaving tenants just eight weeks to find a new home. Banning these notices will “give renters much greater security and stability,” according to Labour.
The Bill will also give tenants more power, like the ability to challenge rent increases and the right to request having a pet. Additionally, rental homes will need to meet decent standards to ensure they are safe, secure, and hazard-free.
It will also become illegal for landlords to discriminate against tenants who receive benefits or have children when renting out their property.