Last week, the UK government announced their legislative programme for the next parliament during the Queen’s Speech. Included in the agenda were several proposals of significant interest to the Real Estate sector, with digital technology and data sitting at the core of the developments.
Firstly, major changes to the planning process were announced in order to promote enhanced levels of construction within the country. Much of the current processes have been around for quite some time and many of these will be streamlined with the aim of speeding up the time to approve. Central to this will be a move away from a system based around documents to one built using shared digital services such as mapping. In addition, there were also proposals to reform the current Section 106 agreements and introduce a new Infrastructure Levy.
Although a number of the proposals were already included in the Government’s recent consultation paper, the proposals will still represent a major change to the current procedures. By utilising digital technology and data, the government hopes to make the planning process simpler and clearer for all by allowing a greater number of stakeholders to view and analyse relevant information and submissions. Ultimately, these changes are aimed at facilitating the planning process to allow more homes to be built in order to support the population, but digital transformation has been a long-time coming for the Real Estate sector and will be a welcome additional benefit of the reforms.
Secondly, there are plans to introduce a new building safety regulator. Following on from the Grenfell disaster, building safety has been a key concern for many leading to the government’s proposal “to ensure that the tragedies of the past are never repeated”. In response, the government is looking to create a single body that will help the industry respond to some of the key sector issues highlighted as part of this tragedy, as well as other concerns.
Thirdly, there are proposed changes within the private rental sector with the government stating their intention to proceed with a ‘Renters Reform Bill’ that may include proposals to abolish Section 21 ‘no fault’ evictions. This measure has resulted in strong feelings on both sides with opponents to the ban. Some in the against camp have argued that this reform will result in less private rental properties being made available on the market and that those that do remain will therefore potentially be more expensive and subject to a greater level of tenant vetting, likely reducing availability to lower income and/or council renters. On the other side, supporters of the measure have championed the reduction in uncertainty for tenants from the ban.
In addition to the above, there will also be curbs on increases in ground rents put forward by freeholders for new leasehold properties.
Within DTSQUARED we consider these proposals to be interesting and reflective of the challenges we see within the real estate sector over the coming years. In particular we are excited by the opportunities brought by increased digitalisation within the planning process. We believe that data will play an increasingly important role within the industry in the future, with far reaching impact akin to the transformation we have seen in other sectors. Organisations that grasp these opportunities will put themselves in a very strong position by not only continuing to comply with government requirements and regulations as they develop, but also directly benefit in the form of enhanced customer service, improved insights and extended profitability.
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