As discussed here, in January this year the Government published draft legislation to revolutionise the way in which flats are owned and managed in England and Wales.  The headline provisions include capping ground rents payable under existing long leases at £250 per annum, abolishing forfeiture for long residential leases, replacing leasehold with commonhold for new flats, and continuing the leasehold reform process by implementing the remaining aspects of the Leasehold and Freehold Reform Act 2024. This momentous draft Bill is currently undergoing pre-legislative scrutiny by the Housing, Communities and Local Government Committee, and the Government will need to review the information it received via its consultation which closed in April.

The speech indicates that there will be new building safety legislation:

• creating a new legal duty to remediate defective cladding. Responsible persons, such as freeholders, will become obliged to identify, assess, and remediate their buildings promptly. Sanctions could include criminal prosecution;
  
  
• making construction product manufacturers pay towards fixing cladding problems;
  
  
• enabling developers and contractors who have already remedied defective cladding to claim damages from the relevant construction product manufacturers;
  
  
• giving regulators greater enforcement powers;
  
  
• mandating how external wall assessments are carried out to ensure a nationally consistent approach to remediation work;
  
  
• introducing an 11-18 metre register to identify all remaining buildings requiring remediation so that there will be a complete record of all medium-rise buildings in England;
  
  
• implementing a remediation backstop to allow a third party, such as Homes England, to step in and carry out remediation work themselves if the Responsible Person has not done so, and
  
  
• fixing gaps in previous legislation to protect residents and guarantee a route to remediation.

This announcement will cause some dismay in the real estate development sector, some of which still struggling to understand all the complexities of the building safety regime established by the Building Safety Act 2022.  Yet another buildings register will add to red tape, and new powers for the Building Safety Regulator (whose slow performance caused major construction delays in 2025) will please no-one.

This Bill will protect social housing stock by increasing the eligibility requirement for the statutory 'right to buy' to 10 years, amending percentage discounts to better align with new maximum cash discounts and exempting newly built social housing from the 'right to buy' for 35 years.  It will also increase protections for tenants suffering from domestic abuse, and streamline existing legislation to make it easier for providers of social housing to invest in new social and affordable homes.

This Bill is intended to tackle the problem of late payments between businesses, which particularly affects SMEs, and to improve the flow of cash through supply chains.  As explored here, the area of particular interest for the real estate sector is the proposed ban on the practice of deducting and withholding retention payments under construction contracts.

The Speech is intended to meet Labour's manifesto promises, and therefore most of it came as no surprise.  In terms of what the Speech was lacking, many in the real estate sector will be disappointed to see no clear progress on reforming business rates, which remain a major cost burden for firms across the UK.  The British Chamber of Commerce also pointed out that "although there was a great deal of emphasis on the UK’s economic security there was little detail on strengthening our supply chains", which is of great concern to the construction sector.  We will report further when more information is released about the new legislation, and in the meantime further information can be found in the background briefing notes.