General Election 2024 — proposed policies for the real estate and housing sectors

With the UK heading for a general election on 4 July, The Conservative Party and The Labour Party have been busy setting out their policy platforms. 

Both have placed the real estate and housing sectors centre stage in their campaigns, with a suite of reforms intended to improve the planning system, support increased house building, empower local authorities and more. 

Here, Oskar Musial and Stephen Moon take a quick look at some of the policies and promises set out in both parties’ manifestos that are likely to have the most significant impact on real estate and housing if implemented. 

Overlapping policies

There is some degree of overlap in focus between the Conservatives and Labour. 

For example, both parties are promising reforms to the planning system, the abolition of section 21 evictions and programmes to deliver 1.6m and 1.5m homes respectively in England over the next parliament.

However, there are also some key differences that will be relevant to landlords, tenants, developers, local authorities and others involved in the sectors.

The Conservative Party 

Reforming the planning system

The Conservatives say that they intend to “simplify the planning system to make it easier to build, faster” with the intention to support both housebuilding and major infrastructure projects. 

In terms of specific measures around house building, the Conservatives intend to abolish the nutrient neutrality rules. These are environmental measures that require certain new housing developments not to add more ‘nutrient pollution’. Local authorities may also be required to set land aside for local and smaller house builders, while section 106 burdens may also be lifted for more smaller sites.

In terms of infrastructure, there are promises to allow quicker changes to already consented projects, end frivolous legal challenges by filtering out judicial reviews that lack merit and support the regeneration of defunct shopping centres.

Abolishing Section 21 evictions

Another policy proposal in the Conservative’s manifesto is the introduction of a Renters Reform Bill which will “fully abolish Section 21”.

Currently, residential landlords may use the procedure set out in section 21 of the Housing Act 1988 to obtain possession of a property let to a tenant on an assured shorthold tenancy. The Section 21 procedure doesn’t require the landlord to specify any grounds of possession. Hence, it’s known colloquially as a ‘no-fault’ eviction. 

At the same time, the Conservatives say that they intend to “strengthen other ground for landlords to evict private tenants guilty of anti-social behaviour”.

Completing leasehold reform

Two days after the Prime Minister announced the general election on 22 May, the Leasehold and Freehold Reform Act 2024 came into law. Primarily, this Act introduced a ban on the granting of long leases on new houses and expanded tenants’ rights to request lease extensions and acquire their freeholds.

The Conservatives say that they now intend to “complete the process of leasehold reform” in the next Parliament by capping ground rents at £250 (reducing them to peppercorn over time), ending the misuse of forfeiture and making it easier for tenants to take up commonhold (an alternative tenure to leaseholds).

Changes to business rates

The Conservatives say that they intend to increase the multiplier on distribution warehouses that support online shopping over time. 

Multipliers are used to determine business rate liability by applying them to the rateable value of each commercial property as recorded in a rating list. According to the Conservatives' manifesto, this is intended to ease the burden of business rates for high street, leisure and hospitality businesses.

 

Continued cladding support for leaseholders

The Conservatives have outlined a plan to address historical building safety issues, particularly in mid- and high-rise buildings. It indicates a commitment to continuing developer-funded remediation programmes. This approach builds upon previous legislation that protects leaseholders from the costs associated with cladding remediation following the Grenfell Tower tragedy.

The Labour Party 

Reforming the planning system

Like the Conservatives, Labour has also put reforms to the planning system at the heart of its manifesto.

This mentions general proposals to change the planning regime to facilitate “nationally significant infrastructure” such as new roads, railways and reservoirs, update the National Policy Planning Framework, reintroduce mandatory housing targets, build a new generation of new towns and release lower quality green belt land (termed by Labour as ‘grey belt’ land). Related to this is a promise to further reform the rules on compulsory purchase compensation.

Labour has also talked about implementing a solution to unblock the building of homes affected by nutrient neutrality rules — although outright abolition hasn’t been mentioned.

Abolishing the leasehold system

Labour’s manifesto proposes to abolish the leasehold tenure for all residential properties, with the party intending to take up the Law Commission’s proposals on leasehold enfranchisement, right to manage and commonhold. 

For new leasehold flats, Labour intends to ensure that commonhold becomes the default tenure. Commonhold was first introduced by the Commonhold and Leasehold Reform Act 2002 as an alternative to leaseholds in multi-occupancy properties. In a commonhold, the common parts of a property are owned and managed by a company (a commonhold association) whose membership consists of the individual unit holders who hold their individual units as freeholds.

In the meantime, Labour promises to tackle unregulated and unaffordable ground rent charges and address estate charges that levy unfair maintenance costs on homeowners.

New rights for residential tenants

Like the Conservatives, Labour also plans on abolishing the possession proceedings available under section 21 of the Housing Act 1988 and promises new rights for residential tenants to challenge unreasonable rent increases as well as new obligations on landlords to fix health hazards, which will be modelled on the existing requirement for landlords in the social housing sector contained in the Social Housing (Regulation) Act 2023.

Replacing business rates system

Labour says that it intends to replace business rates with an entirely new system. While it’s unclear exactly what this new system will look like, Labour’s intention is for the new system to “level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship.”

Improving building safety

Labour has promised to “take decisive action” in improving building safety. While its manifesto doesn't specify what actions will be taken, it signalled an intention to focus on building safety and use regulation as a means to achieve this goal. 

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