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Queen's Speech - Good News for Property & Construction
Posted on May 19, 2016

Queen's Speech - Good News for Property & Construction

The Queen's speech itself is a simple list of highlights of the government's upcoming planned legislation - not all of which will see the light of day, but at least we can see the intended direction of travel.

Looking at the speech purely from the perspective of the Property and Construction industry, there is plenty to be optimistic about. Here are the highlights:-

"To support the economic recovery, and to create jobs and more apprenticeships, legislation will be introduced to ensure Britain has the infrastructure that businesses need to grow."

The Neighbourhood Planning and Infrastructure Bill will in theory simplify and speed up the planning process to ensure developments get off the ground faster. Compulsory Purchase will be made "clearer, fairer and faster". Compensation will be based on "the market value of the land in the absence of the scheme underlying the compulsory purchase."

The National Infrastructure Commission will be put on a statutory basis and tasked with setting out a "clear, strategic vision on the future infrastructure that is needed to ensure the economy is fit for 2050."

The Land Registry is being prepped for privatisation - this will help raise some cash for the chancellor and will provide a nice revenue stream for whoever gets hold of it.

So - good news for developers, house builders, valuers and property lawyers. Not a bad start.

"My ministers will ensure the United Kingdom is at the forefront of technology for new forms of transport, including autonomous and electric vehicles."

The Modern Transport Bill might have significant implications further down the line as it deals with drones, driverless cars and commercial spaceflight, but our key area of interest for now will be the High Speed Rail (London-West Midlands) Bill - that finally gives the government the legal powers to construct and operate Phase One of HS2. Everyone assumes HS2 is a done deal, but politics is a funny old game. Until this one gets on the statute books HS2 can't get out of the station - no matter how much money has already been spent on it.

"To spread economic prosperity, my government will continue to support the development of a Northern Powerhouse."

When it comes to the Northern Powerhouse, the rhetoric is often strong, but the details on spending can be a bit thin. Key for the industry will be the devolution deals in Liverpool, Manchester, Sheffield, Tees Valley and the North East that will see directly elected mayors by 2017 and local control over housing and transport. Some cash (£15m) has been promised to support Northern Powerhouse trade missions which could help to attract more inward investment to the region from China and elsewhere.

"Legislation will also allow local authorities to retain business rates, giving them more freedom to invest in local communities."

The Local Growth and Jobs Bill includes provision for local authorities to retain business rates. The new combined authority mayors will also have the power to levy a supplement on business rates to help fund new infrastructure projects.

It remains to be seen how this would work in practise, but any additional source of funding for infrastructure should be welcomed by the industry.

"My government will support aspiration and promote home ownership through its commitment to build a million new homes."

The million new homes figure is often quoted, but delivery is what matters. We already know that Help to Buy has been extended to 2021, but finally there is some detail on the Starter Homes scheme. Funding of £2.3bn is being made available to support the building of "up to 60,000 Starter Homes by 2020". £1.2bn of this is allocated to remediate brownfield land.

The government has also flagged up £3bn for a "Home Building Fund", comprising £2bn in long term loans to "unlock a pipeline of 160,000 to 200,000" homes, and £1bn to support "small developments and custom builds".

A "Housing Guarantee Scheme" potentially worth £10bn will help support delivery of affordable housing and "purpose built private rented homes".

There is no doubt that this government is committed to promoting home ownership and house building is a key part of its economic as well as political strategy. Whether or not the "million new homes" is delivered or even achievable, the industry should continue to expect a favourable regime to support the planning, development and delivery of housing for the foreseeable future.

"To ensure that more people have the opportunity to further their education, legislation will be introduced to support the establishment of new universities and to promote choice and competition across the higher education sector."

The Higher Education and Research Bill will make it "easier and quicker for new high quality providers to start-up, achieve degree awarding powers and secure university status". This gives a great opportunity for the private sector to get a slice of the higher education pie and potentially will mean a significant number of new builds. Of course any further expansion of the higher education sector means more student accommodation as well, so this looks like a win-win for Property and Construction. One to watch.

"My government will legislate to reform prisons and courts to give individuals a second chance."

The Prison and Courts Reform Bill will see the creation of "reform prisons" which is bound to involve the private sector and new builds. The government had previously announced the closure and sale of a number of older prisons - expect this programme to be accelerated. The sale of older prisons on desirable development land, especially in London and the South East will fund new, purpose build prisons with the ultimate aim of reducing re-offending rates. Should be some good opportunities for the industry here.

"My ministers will invest in Britain’s armed forces, honouring the military covenant and meeting the NATO commitment to spend 2% of national income on defence."

A well-funded armed forces is good news for property and construction. Once all the military toys are paid for, a good chunk of this cash will be going on the MOD estate. Under the Strategic Defence and Security Review there are proposals to reduce the size of the MOD built estate by 40%. This will mean the sale of some land with development potential, but there will also be significant works (and funding for them) to make the remaining estate fit for purpose. Lots of opportunity for the industry here.

As far as the Construction and Property sector is concerned, this year's Queen's speech promises some great opportunities over the next couple of years. There should be more clarity on long term infrastructure with potential for funding assistance from Local Authorities. There should be more land available for development and the planning process should be simpler and faster. There will be continued support for house building across the country and there will be opportunities for the industry in defence, education and prisons.

Among the 21 bills proposed for this parliament, there are a few more that will further underpin the health of Property and Construction.

The Lifetime Savings Bill will help people save to get on the housing ladder, the Pensions Bill will further reform pensions to make it easier to access pension funds to invest in property and the Draft Law of Property Bill will "simplify the law around land ownership".

Thank You, Ma'am!

 

 

 

 

 

 


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