Property promises…what next following the election result?

The results are in and the Conservatives now have a large majority in Parliament. We all know that the immediate focus of the new government will be to ‘Get Brexit done’. In the field of property law, it is perhaps more a case of ‘not yet done’! The Conservative manifesto proposals largely focused on initiatives that had already been announced in relation to residential property. So what key developments can we expect to see over the term of the next Parliament?

Building and buying

The manifesto stated that they intend to continue to work towards their target of 300,000 new homes a year by the mid 2020s. This includes all types of housing though and there was no indication of the balance between public and private sector housing. They also stated that they intend to make the planning system simpler for the public and small builders. We await further detail but this could be good news for small-scale developers.

Future tax changes mean that it may not be quite so attractive for overseas buyers to invest in UK property (although the exchange rate may be the key factor for overseas investors). The previous Conservative government ran a consultation on introducing a 1% SDLT surcharge for non-UK resident buyers but the response has not yet been published. During the election campaign, the Conservatives referred to a 3% surcharge but the manifesto itself does not actually contain any specific figures, so we don’t know how much it will be even if it were to happen.

Problems with leasehold 

Leasehold reform has been a hot topic over recent years. In relation to long leases, the manifesto reaffirmed their commitment to ban the sale of new leasehold houses and restrict ground rents to a peppercorn. The government first announced that it intended to make these changes on 21 December 2017 (in the response to the consultation ‘Tackling unfair practices in the leasehold market’). Ground rent issues have been well publicised in the media. However, there is also a technical legal point where ground rents can potentially trigger the application of the Housing Act 1988 to long leases with unintended consequences. Lenders are aware of this and it can slow transactions down as it must be dealt with. The government stated that they would close this technical loophole two years ago - action on this point would be welcome.

We can expect to see the government push on with plans to abolish no fault evictions for short leases (known as ASTs). This is something that the Labour Party also supports and could mean a major change to the private rented sector. The government first announced this back in April and issued a consultation last summer. However, the manifesto also refers to strengthening rights of possession for ‘good landlords’ so it will be interesting to see the detail of these proposals.

Eco homes 

The environment was one of the key issues discussed by all of the major parties in the run up to this election. Labour and the Liberal Democrats both stated that all new homes must be built to zero–carbon standard (this means that as much energy is generated on-site, through renewable sources, as is used). It is not entirely clear what we can expect from the Conservatives, as they simply stated that they will support the creation of new kinds of homes that have low energy bills. However, it is likely that there will be some green housing initiatives in the future, as the Conservatives stated that they would prioritise the environment in the next budget.

It seems that there may some significant future developments in store for property law, particularly in relation to leasehold property. However, we are likely to have wait for further technical details, as the top priority for the new government starts with a B rather than a P..!