There’s always a lot going on in the housing market, especially with ever-evolving housing policies. And that’s no understatement for what’s been going on over the last few weeks, particularly with political party conferences, having something to say on housing.
In our latest People in Property series, Move iQ founder Phil Spencer sat down with Timothy Douglas, Head of Policy and Campaigns at Propertymark, to discuss the recent political party conferences’ take on housing policy.
We aimed to uncover what they said and whether it will lead to a positive outcome. Here’s a summary of what they discussed.
Party conference and housing policy
Party conferences are the standout key political event in the calendar every year and Propertymark were at all three in 2023.
The Liberal Democrats
Housing policy was on the agenda and there was a housing debate.
The conference kicked off with Angela Rayner the new shadow levelling up minister, as a result, housing dominated the agenda.
Housing received the least coverage. Although received new information about funding for towns and levelling up across the country.
The Propertymark pledge
The pledge was for politicians to sign up for Propertymark’s call for all property agents to be qualified and regulated. This would be good news for everyone, particularly the consumer.
New home building targets
The current Government has pledged to build 300,000 homes annually but has yet to deliver, although they have committed to this goal again. Phil asked, why?
Academics and civil servants set housing targets based on population projections.
Timothy voiced several factors as to why Governments fail to meet their targets. These are external impacts – are there enough qualified housebuilders and is the supply chain up to it? As well as debates in local communities around planning which can hinder progress.
He also raised the question of whether we are building what’s truly necessary, emphasizing the need for more social housing, affordable housing, housing for the private sector as well as more housing for people, to buy.
While there has been a focus on building new homes for first-time buyers, we need a housing strategy that builds for everyone.
How do we progress on housing targets?
Most people don’t object to new house building as part of broader housing policy efforts. However, the existing residents tend to be the afterthought.
The Government is starting to recognize that new infrastructure, such as schools, medical facilities, and roads, should be the initial focus. Leading the way for planning and house building.
Leasehold reform as a key component of housing policy
This is something that Propertymark has campaigned on for several years now. Its research paper of 2018 ‘Leasehold: A Life Sentence’ highlighted a lot of leasehold issues.
One piece of legislation has banned or reduced to zero peppercorn rate, ground rents on new leases, effectively reducing costs for consumers. This makes living in these properties a more viable and fairer option.
The Leasehold and Freehold Reform Bill, discussed in detail on 11 December 2023, successfully passed through the House of Commons. It was well-received by various political parties, although some believe it could have gone further. The Bill is now moving to the next phase, where a committee will review it closely, considering every part and any changes needed. After this detailed review, it will go back to the House of Commons for another reading.
This is positive news for the consumer because it’s going to reduce costs and complications. In addition, it means that hopefully, leasehold properties will be simpler and easier to sell and buy and people, won’t be exposed to additional costs.
While we have Commonhold it hasn’t probably taken off. The Commonhold Council was set up by the Government and includes representative bodies to participate and see how we can get more Commonhold homes onto the market in the UK.
When building a Commonhold block from scratch, every unit and unit holder becomes part of that Commonhold Association. There are stipulations around the certain number of directors and a sort of code and ethics they can deal with to work out disputes, but essentially, everyone has an indefinite freehold and is part of the management.
There’s also the option to convert from leasehold to Commonhold, but this is a lot more complicated.
How quickly reforms happen
Legislation tends to take 9 to 12 months to get through. So, despite being 12 months from a general election, we still have the opportunity to do it. It was in the King’s Speech and something that the UK Government wanted to prioritise.
There are a lot of interested parties, from consumer groups to professional bodies in the legal world who want to shape this legislation, make it work, and get it into the statute book.
Are politicians really aware of housing policy needs?
Politicians are certainly aware of the housing policy issues, but whether they have the full appetite to address them is yet to be determined.
The Renters Reform Bill will change the way we rent in England. With lots of MPs, talking about welfare, tax and supply issues, we need to ensure landlords, as housing providers, stay in the market and we keep the good ones.
Local Housing Allowance (LHA)
Local Housing Allowance (LHA), a crucial part of housing policy, aims to help renters with their housing costs. But the problem has been that since 2010 the amount of money given doesn’t match what it costs to rent.
In the 2023 Autumn Statement, authorities took action to increase the LHA. This change in the Local Housing Allowance will likely benefit around 1.6 million households. This means more households will receive housing benefits closer to what they actually pay in rent. This change is expected to provide an average of £800 in benefits to these households from next year.
Scotland’s rent caps
The Scottish Government brought in rent control using emergency legislation. This has been extended to the maximum allowable time of 18 months, coming to an end in March 2024.
The problem is, in Scotland, legislation cannot be looked at in isolation. Because the SMP and Green parties that are in charge of the Scottish Government, want to bring in a national system of rent control.
As a result, many landlords have looked at the market and are questioning what’s going to happen in the future. If they feel they are unable to keep up with their costs, recoup the impact of this and future legislation whether this is energy efficiency or other measures, they exit.
As a result, Scotland’s rent caps have artificially damaged the private rental sector and it’s something to be very mindful of.
Regulation of Property Agents (RoPA)
Will the regulation of property agents ever happen?
Propertymark continues to campaign for unified regulation across the whole of the UK, as it is currently fragmented, for example:
- In Scotland, you need a level six qualification to act as a letting agent.
- In Wales you need a minimum day’s training course.
- Yet to practice as an agent in England there are no statutory minimum entry requirements to work as a sales, lettings or managing agent.
The RoPA report has been with the housing department since 2019. So, the framework for what regulation could look like, is there.
Is there political appetite for housing policy changes?
There were flames at the Labour Party Conference. Propertymark had some very good conversations with the shadow housing team. They said they would look to implement the recommendations in the report.
Labour has also done a big review into the private rented sector, due out soon and Propertymark hope that regulation of property agents will form part of that.
The current Government are distracted and ultimately it is quite difficult to get regulation and new regulatory bodies into primary legislation. Therefore, they are looking more at what we can amend with the existing rules and regulations in the sector.
Housing policies in conclusion
There are two opportunities before the end of this Parliament. Leasehold legislation and Renters Reform legislation are two things that will impact consumers.
We urge the UK Government to ensure managing agents through building safety and leasehold reform are qualified and regulated as well as sales agents. This includes sales agents selling on a developer site.
The challenges that Renters Reform and the huge change that will bring to rent in this country should see qualified and regulated letting agents who can support renters and landlords.
Last Updated: January 17th, 2024