Arthur takes a look at what the Queen’s speech means for the UK’s property market.
This past Wednesday, 21st June 2017, the Queen gave her speech in the Houses of Parliament in an attempt to outline the British government’s proposals for the coming session. The uncertainty prevailing since the General Election has meant that this particular speech was much anticipated. Despite focusing primarily on the issue of Brexit, the Queen’s speech also announced plans for a new Housing Bill focusing on more transparency and fairness, as well as plans to build more homes to tackle affordability.
Let’s take a look at 3 key areas which will affect property….
1. Lettings Fee Ban
Discussed for over six months by the Tories and included in nearly all the other parties’s manifestos for this month’s General Election, the Lettings Fee Ban, announced in the Queen’s speech, looks very likely to pass into law. The newly named “Tenant’s Fees Bill” will essentially stop tenants having to pay money to agents in order to secure a property. The ability to recover unlawful charges will also be included. Government figures indicate that the average amount paid to agents currently stands at £223, despite other agents suggesting that the reality is much higher. Whilst the bill is unpopular with letting agents themselves, claiming that 4000 jobs will be lost as a result of the fee ban, landlords are also sceptical since they will be expected to cover these costs in the future. We could potentially see a rise in rents as landlords seek ways to cover this charge. Nevertheless, considering the current housing climate in which more and more people are forced to rent property for the vast majority of their lives, the Tenant’s Fee Bill will surely guarantee a fairer deal for tenants.
2. Smart Meter Bill
Despite pledging to install smart meters in all homes by 2020, the government has backtracked on its plans somewhat by making the scheme optional for all UK households. However, in the Queen’s speech, it was claimed that the government will ensure that smart meters are offered to every household and business by 2020. This is important since it puts consumers in control of their energy use and brings about an end to estimated bills, which often mean paying way above the correct amount corresponding to one’s energy usage. This should once again give tenants more power in determining bills with their respective landlords.
3. Good Mortgages Bill
The Queen announced plans to enable individuals to use existing possessions as security for a mortgage loan, even whilst they retain possession of these goods. Furthermore, she explained intentions to increase protection for borrowers who get into financial difficulties by ensuring that lenders must obtain court orders before seizing goods relating to failed payments.
It seems only time will tell the outcomes of these proposals for housing, but to summarise, Buy Association claims that “From a property perspective overall, the Queen’s speech only touched the surface and lacked some direct and active messages and guidance for the sector, like helping smaller developers to access public land and appropriate finance”.