07 Nov 2023
The King’s Speech 2023: Improvements to the Housing Market
Category: Property Investment
An Overview
The King’s Speech 2023
The King’s Speech spoke of the need to “make difficult but necessary long-term decisions” to benefit the country. Long-term challenges for the UK followed the impact of COVID-19 and the war in Ukraine. Because of this, His Majesty the King announced the government’s priority to “improve and change the country for the better.”
As well as focusing on economic growth and security of the British population and future generations, the government will aid the Bank of England to reduce inflation to its target. This will ease the cost of living, supporting families and businesses in finances, and reduce debt in the public sector.
Such aid to the cost of living and inflation surrounds the UK’s housing market improvements. The King’s Speech highlighted the much-needed security for both renters and landlords, as well as investing in regeneration schemes in parts of the country currently ‘left behind’.
“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.
“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.”
His Majesty King Charles III, King’s Speech, 7th November 2023
The Leasehold and Freehold Bill
The Leasehold and Freehold Bill announced in the King’s Speech aims to improve the rights of leaseholders. Following the ‘leasehold scandal’, many homeowners were trapped after buying a leasehold new-build, spending growing amounts on ground rent and service charges. Not only did the King speak of plans to cap existing ground rents but also put disciplinary service charges to an end.
Ground rent averages between £200 and £500 per year. The recently instated Leasehold Reform (Ground Rent) Act banned new leases from being charged ground rent. However, this does not yet apply to existing leases.
What does the Leasehold and Freehold Bill aim to do?
- Make it easier and more affordable for leaseholders to buy freehold houses.
- Increase the standard extension term from 90 years to 990.
- Have full transparency on service charges.
- Ban new leasehold homes created in England and Wales.
Such changes will make it easier for people to re-mortgage and sell their homes. Even apartments, which are mainly sold as leaseholds and may not see a drastic change, will still benefit from the Leasehold and Freehold Bill in the improved rights.
The Renters’ Reform Bill
While a controversial addition to the property market, filled with many differing opinions, the Renters’ Reform Bill will ultimately provide ‘more security for all’.
When it comes to landlords increasing tenants’ rent, they will have to submit a Section 13 notice as a legal requirement. This, alongside abolishing no-fault evictions (Section 21) and ending blanket bans on pets, protects renters – especially those on benefits and with children. As for landlords, the Bill aims to make eviction easier for antisocial behaviour or rent arrears. Processes will be far simpler for both sides, particularly as rental prices rise.
However, since receiving its second reading two weeks ago, the Renters’ Reform Bill is being carried into the next Parliament. This is welcome news to the property market. Placing the Bill on hold until “stronger possession grounds a new court process in place” will protect landlords from lengthy delays to legitimate tenant evictions.
“My Government will invest in Network North to deliver faster and more reliable journeys between, and within, the cities and towns of the North and Midlands, prioritising improving the journeys that people make most often.”
His Majesty King Charles III, King’s Speech, 7th November 2023
Network North and Regeneration
His Majesty in the King’s 2023 Speech proposed Parliament to “deliver a long-term plan to regenerate towns and put local people in control of their future.” This coincides well with the Levelling-up and Regeneration Bill, which was recently made law.
Cities and smaller towns undergoing improved infrastructure greatly benefit from higher demand and a growing economy. From transport links and the public realm to new homes and workplaces. The King’s Speech highlights that the towns ‘left behind’ should see such regeneration.
This is Network North’s aim. Following the axed Northern route of HS2, this replacement benefits smaller areas of the Midlands and North. In addition to railway improvements, Network North upgrades roads, public transport, and general connections between towns. These transport upgrades will undoubtedly increase the quality of life for residents and investment potential.
Confirming the government’s aim to address and help the country’s current concerns is refreshing. Property investors and renters will gladly welcome the plans proposed in the King’s Speech. From improving inflation and overall affordability to the security of buying and renting a property, the UK government’s agenda for refining the country is clear.
Network North and general regeneration projects in previously and currently untouched parts of the Midlands and North will unlock fantastic capital growth potential for buy-to-let property investments. With such areas undergoing improvements to the public realm and transport links, the construction of new homes and revitalised high streets will impressively increase their desirability, economy, and profitable opportunities.
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