"The Government’s pledge to unblock planning restrictions for the housebuilding sector is very welcome, but we need to see real action"
- Ryan Etchells - Together
In the package of more than 35 bills announced today, the new Labour government has prioritised growth with a focus on housing and planning reforms.
Ahead of the speech, the newly elected Prime Minister, Kier Starmer said: “Now is the time to take the brakes off Britain. For too long people have been held back, their paths determined by where they came from – not their talents and hard work.
“I am determined to create wealth for people up and down the country. It is the only way our country can progress, and my government is focused on supporting that aspiration.
“Today’s new laws will take back control and lay the foundations of real change that this country is crying out for, creating wealth in every community and making people better off – supporting their ambitions, hopes and dreams.”
Housing and planning
The King announced that his ministers "will get Britain building" as they work to "accelerate" the delivery of "high-quality infrastructure and housing".
Labour has promised to reform the system, which has often been called 'antiquated' and plans to build 1.5 million homes in England over the course of this parliament. However, In her first speech as chancellor, Rachel Reeves said that it was not a "green light" to any kind of housing development.
The King also said that ministers will also pursue "sustainable growth" by "encouraging investment in industry, skills and new technologies".
Leasehold and renters' reform
The King announced that the government would introduce legislation to "give greater rights and protections" to those renting - including "ending no-fault evictions", with draft legislation published on leasehold and commonhold reform.
As you would expect, the property industry was quick to react. Here's what they're saying.
Ryan Etchells, Chief Commercial Officer at Together, says: "The Government’s pledge to unblock planning restrictions for the housebuilding sector is very welcome, but we need to see real action.
"The success of this policy rests on utilising the UK’s ‘grey belt’ although, as of yet, we don’t have a definition of what, where or how much of this exists. Our own research has shown that at least 19% of the UK’s property professionals want more support with brownfield development, and so Labour’s focus on these sites, and those like them, should see more spades in the ground – further boosting supply and activity across the property industry.
"The current lack of housing stock is seeing owner-occupiers competing alongside Housing Associations and private landlords for mainstream properties. More stock is needed to provide competition in the market and provide places for people to live- however, in order to achieve this we must also assess legislation around housing.
“Our current system is broken, with too much power at local council level, which simply doesn’t have the specialist skills needed to be effective. Until the government delivers on its promises, many builders will be hampered in planning loops, making them unable to deliver on their commitment to build new houses.
“This needs to be top of the agenda for the new government to get property investment moving and deliver the housing stock the UK needs. Buying and developing property is a big undertaking for many, and this will only happen if the underlying economy provides the confidence needed for this kind of long-term planning.”
Mobeen Akram, New Homes Director, Mortgage Advice Bureau: “Today’s King Speech has further underlined our new government’s commitment to reignite the housing industry. Now that the dust has officially settled, it's time for Labour to deliver on all the proposals they brought to the table.
"Even at these early stages, there’s no doubt that the government’s focus on planning as a driver of economic growth is a positive development for the industry, but Labour has an uphill climb ahead of them.
“To reach that all-important 1.5m homes target, we need to get off on the right foot. By pushing the need for collaboration between the government, lenders, and housebuilders, we may start to see some progress. Whether it’s mandatory housebuilding targets, investing in local authorities, increasing product innovation or additional support for first-time buyers, we all have our part to play in driving growth across our sector.”
Iwono Hovenko, Senior Real Estate Analyst at BI, said: “UK planning reform and the re-introduction of compulsory housing targets may boost UK homebuilders' completions, especially if interest rates fall, which could lift demand. Yet any volume ramp-up could take time, and capital constraints may also cap growth pace.
"Homebuilders with large land banks and cash piles, like Barratt, Taylor Wimpey and Persimmon, might thus be better positioned to reap rewards of the simpler planning process. Rising completions could boost operating leverage and margin, which halved versus pre-pandemic levels, as sales plummeted.”
“Given the government's ambitious plans for construction across all segments, the higher activity could lift cost, especially for labour as there are already existing shortages.”
“The government also can't solely rely on profit-driven developers to deliver its target of 1.5 million homes over five years, given the cyclical nature of the industry, which aligns build rates to demand. Moreover, attracting smaller builders back into the market -- after many exited amid hefty regulation and high capital requirements that left only the largest companies able to cope -- should be a key pillar of diversifying housing supply.”
Oli Sherlock, Managing Director of Insurance at Goodlord, comments: "With the Government confirming plans to scrap Section 21 as part of a Renters' Rights Bill, there is only a short window of time in which to address the one area that could make or break the success of the new legislation: the courts.
"We must unclog the court backlog. The legal system is fraying at the seams and cannot cope even with current level of claims. There's no value in scrapping Section 21 if the court system can't handle the influx of demand it will inevitably unlock. We need a plan, with timelines, on how the legal system will cope."
Lauren Hughes, Head of Customer Success at Vouch, comments: "I'm sure the whole sector is delighted with the Government's ambitious plans to "turbocharge" the building of new homes.
"The only route to re-stabilising the housing sector is building more high-quality homes - this will get more supply into the rental market, take pressure off tenants, and create new investment opportunities for landlords. But houses aren't created overnight, so we need to get shovels in the ground as quickly as possible if we want to see the impact within a reasonable timeframe."
Wayne Douglas, Managing Director for City & Country comments: "Labour has an ambitious plan to not just unlock 1.5 million homes over the next parliament, but solidify its position as the party to transform housebuilding.
"The immediate and only way to generate the required volume of housing is to reform the planning system, but in order to do that the Labour party must open its eyes to the reality of building on the green belt. Simply put, there is not sufficient brownfield land to meet the extreme housing needs facing our country.
"The green belt, which is often made up of cultivated agricultural and recreational land, is neither particularly biodiverse nor ecologically valuable. The King’s Speech has set us on the path to planning reform, but it is imperative that the Labour Party now moves fast to set the tone for housing delivery over the next five years.
"In order to do that, we need to look more closely at our protected land and remove the shackles on the so-called green belt to provide high-quality homes for more communities around the UK.
Craig Carson, Managing Director at Barratt West London, comments: “For the first time in nearly a decade, there will be a Labour government working together with the Mayor of London and with a commitment to build 1.5m homes across the next parliament, overhaul the planning system and, perhaps crucially for Londoners, to take a brownfield-first approach when it comes to development.
"The prioritisation of brownfield and the new greybelt land will help unlock large swathes of land for development, including former car parks and commercial units.
"This will be particularly beneficial in the outer boroughs of London such as Barnet, Harrow, Ealing, Newham and Brent, alongside more central locations such as Southwark, ensuring developers can accelerate build programmes and deliver much-needed high-quality, sustainable homes for Londoners.
"It is vital that the new government works with the Mayor to create a pro-development environment and offer support to first-time buyers and young families to be able to get a foot on the ladder in the capital.”
Lynda Clark, Editor of First Time Buyer Magazine, comments: “Housing was a major focus in this King’s speech. Indicative polls over the last few weeks showed that first-time buyers are optimistic about the changes that a Labour Government will bring to a tough housing market. They are right to hope for better - house prices are high, yanking up deposits behind them, while mortgage rates linger at around 5%, making it hard to borrow.
"Labour’s plans to address the housing crisis through an accelerated housebuilding programme will lead to better housing options for buyers, and first-time buyers will be supported by the extended mortgage guarantee scheme. Existing initiatives including shared ownership, Rent to Buy and London Living Rent remain available, and with greater backing from a new Government these will continue to help thousands of first-time buyers each year escape the rental trap and get on the property ladder.”
Edward Heaton, founder of buying agency Heaton and Partners comments: “The sheer scale of the Labour majority will hopefully give some stability to the property market for the next few years. It remains to be seen how the new government may or may not tinker, particularly with taxes, but for the most part we expect more of the same. It will also be interesting to see how Labour’s plans for mass new housebuilding will be executed. I very much hope it will be a success.”
