King’s Speech Confirms Housing Reform Bills

The Speech confirms a major set of reforms in leasehold, housing and building safety, delivered through the following bills:

Leasehold and Commonhold Reform Bill

The Government has confirmed long-awaited legislation to reform the leasehold system and establish a new legal framework for commonhold. This comes following publication of the Draft Commonhold and Leasehold Reform Bill earlier this year and subsequent scrutiny by the Housing, Communities and Local Government Committee.

The legislation is expected to:

• Introduce a new commonhold framework designed to make commonhold workable for a wider range of developments and support its transition to the default tenure for new flats;
• Ban the use of leasehold for new flats;
• Make it easier for existing leaseholders to convert their buildings to commonhold;
• Cap existing ground rents at £250 per year, reducing to a peppercorn after 40 years;
• Abolish forfeiture and replace it with a new leasehold enforcement regime intended to strengthen protections for leaseholders;
• Introduce further reforms to enfranchisement and estate management arrangements.

The Bill is likely to represent the most significant change to residential tenure in a generation.

Remediation Bill

The Government has also confirmed a Remediation Bill aimed at accelerating the remediation of unsafe cladding and strengthening enforcement against those responsible for delays. 

The legislation seeks to:

• Require construction product manufacturers to contribute towards remediation costs;
• Strengthen regulatory enforcement powers and sanctions for non-compliance;
• Introduce a new legal duty to remediate unsafe buildings;
• Mandate consistent external wall assessment standards and create a register of 11–18 metre buildings;
• Allow public bodies to step in where remediation has stalled; 
• Close legal gaps to ensure residents have a route to remediation, including where ownership is unclear.

Social Housing Renewal Bill

Alongside this, the Government announced a Social Housing Renewal Bill designed to protect social housing stock, support investment in new affordable homes and strengthen tenant protections.

The legislation intends to:

• Tighten Right to Buy eligibility and reduce discounts;
• Exempt newly built social homes from Right to Buy for 35 years;
• Strengthen protections for victims of domestic abuse;
• Streamline housing regulation and consents; 
• Repeal unimplemented housing provisions from previous legislation.

Small Business Protections (Late Payments) Bill

The Government has also confirmed a Small Business Protections (Late Payments) Bill focused on tackling late payments and strengthening protections for SMEs.

The legislation sets out to:

• Introduce maximum payment terms of 60 days;
• Enforce mandatory interest on late payments;
• Limit when invoice disputes can be raised;
• Require large companies to report on poor payment practices;
• Strengthen the powers of the Small Business Commissioner;
• Ban retention payment practices in parts of the construction sector.

Read the full King’s Speech briefing notes HERE.

All bills will now proceed through Parliament over the coming months, with further detail expected once the Bills are formally published.

The Property Institute (TPI) will continue engaging closely with Government and stakeholders throughout the reform process and will keep members updated on key developments and implications for practice.

TPI Reacts

In response to the King's Speech, Andrew Bulmer, Chief Executive of TPI, commented: 

On the Commonhold and Leasehold Reform Bill

“The Bill represents a once in a generation opportunity to change the way we own and manage flats in England and Wales. Commonhold and a reformed leasehold will bring greater self-governance to flat owners, who will enjoy new rights but also take on new legal responsibilities, including building safety, company administration and financial governance. 

While we welcome the Bill in principle, we are keen to ensure there are measures that move towards mandatory qualifications for property managers as a minimum, and whilst we understand the Government will want to respond to the consultation exercise and Select Committee, we hope it will declare its intentions soon, so that the sector has some certainty. It is vital that empowered commonholders and leaseholders are supported by competent, qualified professional property managers.

Greater resident empowerment and independence is a worthy ambition but it must not get ahead of protecting those owners from an unregulated sector, managing people’s safety in their homes and millions of pounds in their greatest assets, yet with zero bar to entry. But, with the right safeguards in place, we know it can work. A co-proprietor tenure operates in most other countries around the world, including Scotland. However, with two-thirds of the buildings managed by our members already homeowner-run through resident management companies, it is vital that they have access to professional and competent support.

So, as more homeowners collectively choose their managing agents, there must be stronger regulatory oversight to raise standards. The government must go further than mandating qualifications and introduce regulation of property managers to secure better outcomes for residents and restore confidence in flat ownership.”

On the Remediation Bill

“The slow pace of fixing unsafe buildings, nearly nine years after the Grenfell Tower fire, has clearly shown the need for legislation. The Remediation Bill is to be welcomed as far as it goes, particularly for residents who have been living with dangerous cladding for years. However, the proposed Bill falls short on two crucial issues: implementing a backstop for pledged developers and addressing internal safety defects. 

First, the backstop for inaction applies to landlords, but not to developers - who pledged to fix their buildings more than three years ago but have still only completed 10% of the necessary remediation work, our data shows. This is counterintuitive when developers were responsible for the construction of their buildings and are taking the longest to fix them. We have found that nearly 60% of developer-pledged projects have not yet even agreed the scope of works.”