The Labour Party
The Labour Party’s manifesto is certainly not lacking when it comes to detailed and wide-ranging proposals that would affect the real estate industry. At almost twice the length of the Conservative Party manifesto, it is clear that Labour wishes to bring about sweeping change and make its mark if it achieves success on 4 July.
Housing
The manifesto document is very clear in relation to reform in the residential sector. Labour makes a number of promises involving a root-and-branch overhaul of the regulation of the private rented sector.
The manifesto confirms that, if it comes to power, Labour will immediately abolish section 21 “no fault” evictions, enable private renters to challenge “unreasonable” rent increases and take steps to raise standards in the private rented sector. Labour also promises to take decisive action to improve building safety, including through regulation. The detail is lacking, but it is clear there is a renewed focus on ensuring that “those responsible for the building safety crisis pay to put it right”.
Labour also states that it will “finally bring the feudal leasehold system to an end”. The proposed mechanism for this would be through enacting the package of Law Commission proposals on leasehold enfranchisement, right to manage and commonhold, as well as taking further steps to ban new leasehold flats and ensure that commonhold is the default tenure.
The party promises to tackle “unregulated and unaffordable ground rent charges” and wants to address what it sees as “fleecehold” private housing estates and unfair maintenance costs. Some may raise an eyebrow as to how similar some of these proposals seem to some of the recent Conservative policies in this area.
ESG
On the ESG front, Labour’s manifesto is equally decisive, with the plan being to make Britain a clean energy superpower with cheaper, zero-carbon electricity by 2030, accelerating to net zero.
Labour intends to work with the private sector to deliver this clean power mission and has big plans to double onshore wind, triple solar power and quadruple offshore wind by 2030. It also promises to ensure the long-term security of the nuclear power sector, invest in carbon capture and storage, hydrogen and marine energy, and deliver the provision of long-term energy storage.
Tax
In the tax arena, the manifesto states that Labour will cap corporation tax at the current level of 25% for the entire parliament. It confirms that it will retain a permanent full expensing system for capital investment and the annual investment allowance for small business. Labour promises to provide firms with greater clarity on what qualifies for allowances, in order to improve business investment decisions.
The manifesto states that Labour will replace the business rates system in England, so it can raise the same revenue but in a fairer way. The new system promises to level the playing field between the high street and online giants, better incentivise investment and tackle empty properties. This pledge will be popular with many who see the current system as unfair, but we don’t yet have clarity on how the new regime would work in practice.
Planning
For some time, the development industry has been crying out for stability in the planning sphere, and a chance for the recent spate of reforms to bed down. There may, therefore, be mixed reactions to the significant raft of proposals in the Labour manifesto relating to planning.
One key headline is the ambitious goal for planning reform to facilitate the building of 1.5m new homes over the next parliament. As in other cases, though, bold assertions are accompanied by scant details as to how they will be achieved, and certainly in a timescale to achieve such a significant uplift in delivery in such a short time period, given the lead-in time for delivery of residential projects.
The promise to immediately update the National Planning Policy Framework to undo what Labour refers to as “damaging” Conservative changes – in particular by restoring mandatory housing targets – is one thing which could be delivered relatively quickly, and probably with a lot of industry support.
However, assertions that it will ensure planning authorities have up-to-date local plans are lacking in any detail as to how this will be accomplished. We have seen many different methods employed to try to achieve this over the years, often with limited success.
Ambitions to support local authorities by having additional planning officers, to be funded through increasing the rate of the stamp duty surcharge paid by non-UK residents, are likely to be welcomed by many, but no assurances are given as to how these fees will be ring-fenced for planning departments.
Statements about ensuring local communities continue to shape housebuilding in their area, while also not being afraid to “make full use of intervention powers” to build the houses required, indicate that Labour recognises the difficulties of achieving appropriate balance in the planning regime, but not that it has necessarily found a solution to achieve it.
For some time now, an area of intense debate has been the approach that should be taken to the green belt, and in the lead-up to the election Labour had hinted that this was one area where it was willing to be bold.
While the manifesto maintains the brownfield-first approach, it also acknowledges that brownfield development alone will not be enough to meet housing need. It therefore proposes a “more strategic approach” to green belt land designation and release, to unlock the building of homes. It suggests that the release of lower-quality “grey belt” land will be prioritised and that Labour will introduce “golden rules” to ensure that development benefits communities and nature. In many spheres the green belt is sacrosanct, and these proposals, although probably falling short of what some had hoped, may well still prove controversial.
Another area where there has been increasing focus recently is the role that strategic planning could – and should – be playing in ensuring the delivery of the right development in the right places. Those mourning the loss of regional planning are likely to welcome the commitment by Labour to require all combined and mayoral authorities to strategically plan for housing growth in their areas. Combined authorities will be given new planning powers, along with new freedoms and flexibilities to make better use of grant funding.
The document further promises that Labour will deliver the biggest increase in social and affordable housebuilding in a generation, and that it will achieve this by strengthening planning obligations to ensure new developments provide more affordable homes. This is particularly noteworthy given the repeated efforts by a variety of governments in recent times to restrict the role of planning obligations, in favour first of community infrastructure levy and then infrastructure levy. Perhaps section 106 is here to stay after all.
One change that is likely to find favour with many, and which could be introduced relatively promptly, is the intention to update national planning policy to “meet the needs of the modern economy”, and in particular to make it easier to build laboratories, digital infrastructure and gigafactories. Given the rapid explosion of new uses in recent times, especially in these spheres, any attempt to ensure that planning policy more accurately reflects the uses being brought forward is likely to be welcomed.
The Conservative Party
Housing
On the question of residential reform, the Conservative Party’s manifesto promises to complete the process of leasehold reform that is already in motion. The document confirms a cap on ground rents at £250, reducing to a peppercorn over time. The party also states that it will end the misuse of forfeiture, so that leaseholders do not lose their property and capital unfairly, and will make it easier to take up commonhold.
The manifesto document confirms a commitment to deliver the court reforms necessary to fully abolish section 21 and strengthen other grounds for landlords to evict private tenants who are guilty of antisocial behaviour. On the topic of building safety, the Conservatives will require the continuation of developer-funded remediation programmes for mid- and high-rise buildings.
ESG
In relation to ESG, “a pragmatic and proportionate approach to net zero” is the order of the day. The Conservatives plan to treble offshore wind capacity and scale up nuclear power. The manifesto promises to support solar “in the right places, not on our best agricultural land”.
Tax
On the tax front, the Conservative Party promises to permanently abolish stamp duty for homes valued up to £425,000 for first-time buyers. It will also ease the burden of business rates for the high street, leisure and hospitality by increasing the multiplier on the distribution warehouses that support online shopping.
Planning
As is perhaps to be expected, the manifesto commitments on planning read as an extension of the existing programme of planning reform – or in many cases a restatement of changes that have already been promised, or are even underway. Those hoping that the Conservatives have had their fill of planning reform are likely to be disappointed.
There are a number of areas where it is clear that we could see further changes, including in regenerating shopping centres, further densification of London and introducing a fast-track system for some urban housing schemes.
There is a clear aim to show balance around the transition to net zero while still maintaining the 2050 commitment. The purported limitations on new planning permissions for solar farms are a good example of this. However, given that much of what is suggested reflects changes that have already been made, it is hard to identify the scope for further changes.
There may be some disappointment that the infrastructure levy is given such emphasis. There are those who had hoped that this evolution of the existing community infrastructure levy regime would fall by the wayside, but it is very clear from the manifesto that this favourite of Michael Gove would succeed him, were the Conservatives to retain power.
There are a number of bold assertions around speeding up the planning regime as it relates to infrastructure, in particular the headline of cutting determination periods from four years to one.
However, many of the proposals mentioned are already in progress – for example, the cutting of environmental red tape is meant to be achieved through the shift to the environmental outcome reporting regime, which was introduced as part of the Levelling-up and Regeneration Act 2023. Equally, the regular updating of national policy statements has already been the subject of considerable attention through the research and recommendations made by the National Infrastructure Commission.
Perhaps as is to be expected in a document of this type, there are some headline planning points which, while setting aspirations, provide very little detail on how they would be achieved. One example is the assertion that the Conservatives will support people in choosing electric vehicles by “ensuring our charging infrastructure is truly nationwide”. While this seems a laudable aim, there is no detail as to how that will be achieved.
It is interesting to see that the commitment to abolish nutrient neutrality rules has made the cut. Many will remember that this was last discussed in the context of an amendment to the 2023 Act. However, the proposal was so controversial at the time – being seen by some as compromising environmental protections at the behest of the development industry – that it was dropped.
Less surprising is the steadfast commitment to protecting the countryside and, in particular, the green belt. This is a clear dividing line with Labour, and is likely to find favour with many in the Tory heartlands. It is clear that there is a lot for those in the property industry to watch out for over the coming months and years, whatever the outcome on 4 July.
An earlier version of this article appeared in EGi on 21 June 2024.
Authored by Hannah Quarterman, Stella Bliss, and Ingrid Stables.
