Royal Institution of Chartered Surveyors (RICS) responds to the Queen’s Speech 2022

The Queen’s Speech, delivered this year by HRH The Prince of Wales, focused on economic growth, the cost of living and the need to level up the UK.

The government’s plans for this parliamentary session include a Levelling Up and Regeneration Bill, a Social Housing Regulation Bill, a Renters Reform Bill and a Non-Domestic Rating Bill.

RICS says it understands and shares the Government’s desire to see empty commercial property brought back into use, as it knows that vacant retail units can be a blight on high streets and town centres. The reasons why many shops are unoccupied, however, are complex and will often be linked to issues around demand, business rates or planning permission, as well as the wider context within which they are operating as a result of shifting consumer habits, the rise of online retail and the impact of the pandemic.

RICS is concerned that the government’s proposals to effectively force commercial landlords to rent out empty property may be too blunt a tool and one which does not fully address the challenges faced in the retail sector. In order for our nation’s high streets to thrive it is important that they meet the needs of the local community. Any interventions which do not properly reflect this community or customer need may ultimately prove counterproductive and could end up stymieing the evolution of the high street.

RICS said it would urge that both public and private finance streams should be leveraged to help upgrade carbon-intensive properties too, in the interests of safeguarding the long-term environmental performance and attractiveness of commercial assets. It is encouraging that the Non-Domestic Rating Bill is expected to incentivise business rates payers to decarbonise and invest in their properties through the provision of new reliefs, and that the bill will modernise the business rates system through more frequent revaluations. RICS also would urge the government to use the bill as an opportunity to drive substantial reforms that will deliver fairer outcomes for ratepayers.

It is positive that the government recognises that the provision of high-quality housing as well as infrastructure will be central to achieving its levelling-up ambitions. RICS has supported previously-announced reforms to the planning system which could provide much-needed clarity for regeneration and development, and which would serve the public interest. RICS noted the commitment in the Queen’s Speech that the planning system would be reformed to give residents more involvement in local development. In the absence of a comprehensive Planning Bill, RICS is calling on the Government to use the Levelling Up Bill as the vehicle for delivering ambitious changes to the planning system.

RICS notes that the Renters Reform Bill will apply the legally binding Decent Homes Standard to the private rented sector which is hugely positive for consumers. RICS remains concerned, however, that government action on retrofit across all housing tenures was notably absent from the Queen’s Speech. While the Government has announced plans for an Energy Bill to help support a transition to cleaner, cheaper energy, there is little indication of measures that government intends to take to deliver retrofitting across existing housing stock. Substantial retrofitting work across millions of households is essential if we are to have greener, more environmentally sustainable housing that supports our wider net zero commitments.

As well as the expected reforms to social housing and the rental sector, RICS is pleased that the government also remains committed to its wider programme of leasehold reforms which would make it easier to extend a lease or buy the freehold as these proposals will provide greater certainty to leaseholders.

However, one issue that we believe any reforms should also seek to address is the service that leaseholders receive from managing agents. RICS said it would urge the Government to adopt the Block Management Sector Code which will provide a framework for ethical and competent practice for consumers with regards to the role and responsibilities of managing agents.

Amanda Clack FRICS, Chair of the RICS Construction and Infrastructure Forum and Past President of RICS, said:

“The Government should consult widely to create opportunities for social and economic development as part of its levelling up agenda.

“It is positive that the government acknowledges the urgent need to reform the planning system which we widely support, and we would be happy to work with government to devise a system that acts as an enabler for the levelling up agenda.

“If carefully constructed, planning reforms could help to deliver better outcomes for the benefit of both communities and developers.

“The current lack of certainty in the planning system results in increased costs and risk, resulting too often in development being delayed or cancelled. Investment and development can deliver the housing, jobs and commercial opportunities that will help to tackle regional inequalities within the UK.”

Phil Clark MRICS, Chair of the RICS Commercial Property Market Forum, said:

“As RICS set out in its Commercial Real Estate Impact Report in March, well-managed commercial real estate stock can boost the attractiveness of less developed areas, promoting economic growth and social value for the benefit of people and our society.

“The announcement of a Levelling Up Bill in the Queen’s Speech demonstrates the Government’s continued commitment to the regeneration of urban areas. However, the challenge of climate change alone is massive and immediate. In addition, shop buildings are becoming redundant in less economically active areas as retail continues to move on-line, and office demand is declining as people work from home more.

“Providing economic growth and the right premises to accommodate the Levelling Up Agenda will rely on financial partnership between government and the built environment industry to renovate and upgrade existing commercial assets that will otherwise risk becoming stranded as we transition through a decade of unprecedented change in the built environment. This would be especially impactful in secondary and tertiary locations where owners may be less able to recover the cost of improvements due to low rental values and high business tax rates.

“We need to work at pace to develop financial solutions between Government and industry that enable that transition for the benefit of people and society.”

Kindly shared by The Royal Institution of Chartered Surveyors (RICS)

Main article photo courtesy of Pixabay