In last week’s Queen’s Speech, there was a mention of the Levelling Up and Regeneration Bill, which aims at overhauling the planning system, amongst other things.
The Queen’s Speech lays out the programme of legislation that the Government intents to implement in the next parliamentary session. During the speech, the Levelling Up And Regeneration Bill was mentioned, which is the result of the Levelling Up White Paper that was published this year.
Following the speech, read by Prince Charles this time, the Department of Levelling Up, Housing and Communities has published the outline of the Levelling Up And Regeneration Bill.
What’s In The Levelling Up And Regeneration Bill?
The proposed bill includes a wide range of subject, but it is heavily focussed on reforms of the planning system. As such, it will have an impact on the housing market in the coming years.
One area the bill will impact on the housing market is the introduction of ‘street votes’. These will enable residents to have a bigger say about planning permission for projects in their neighbourhoods.
Effectively, if two thirds of the neighbours are against a project, planning permission will not be granted.
While this would give residents more power over what is built in their neighbourhoods, commentators have warned that it could add to the complexity of the planning process.
Combat Empty Houses
The bill does also contain plans to allow councils to double Council Tax for properties that are empty for a year. Previously, this was only possible after the property was empty for two years.
Industry insiders believe that this shortening of time will increase the number of properties coming onto the market for sale or rent, boosting the much-needed supply of housing stock.
To see action on empty homes included in this flagship Bill is a welcome acknowledgement from the UK Government that this issue is working its way up the agenda.Timothy Douglas, Head of Policy and Campaigns at Propertymark
According to the Department for Levelling Up, Housing and Communities, 653,000 properties are currently empty in England. 36% of which are classed as long-term empty.
If these empty houses came on the market, it would relieve the pressure on the sales and rent market, making it easier for people to find a home.
Premium For Second Homes
The bill also includes plans to give local authorities the power to tax second homes. Local councils will have the ability to charge a council tax premium of up to 100% on second homes.
This is a further sign that this Government wants to clamp down on the ownership of second homes, which is driving up prices in many areas, making it difficult for local residents to afford properties in their areas.
The Bill recognises the impact that high levels of second home ownership can have in some areas and will introduce a new discretionary council tax premium on second homes of up to 100%.Quote from the outline of the Levelling Up And Regeneration Bill published by the Government
This will not only ensure that unused properties come onto the market, according to the outline of the Levelling Up And Regeneration Bill, but it will also give local councils additional revenue to fund services and keep the council tax bill low for local residents.
Housing Market Slowing Down
The announcement of the new Levelling Up And Regeneration Bill comes amid reports by OnTheMarket (OTM), that there are signs that the housing market is slowing down.
According to the OTM’s Property Sentiment Index for May 2022, more properties are starting to come onto the market. This reliefs the pressure and the time it takes to sell a house is becoming longer again.
However, demand from buyers is still strong, despite the cost of living crisis and rising interest rates. In April, 63% of properties in the UK sold within 30 days. Down from 64% last month, but still 9% higher than in April 2021.
At the same time, the number of houses that sold in 60 days increased from 15% in March to 16% in April. And houses that sold in 90 days went up from 5% in March to 8% in April.
Confidence from buyers and sellers is also high. With 76% of active buyers being confident they will buy a property in the next three months.
On the other hand, 82% of sellers are confident that their property will sell.
Despite rising interest rates, buyers are still confident they will be able to afford a mortgage. With only 4% of buyers worrying about getting a mortgage for their purchase. Although it is up by 1% from last month.
So there are signs that the market is on its way to becoming more balanced and more manageable. And some of the measures introduced in the Levelling Up And Regeneration Bill also promise to alleviate the issue of low housing stock in the future.