UK Government Announces New ‘Right to Regenerate’

 

In mid-January 2021, the Ministry of Housing, Communities and Local Government (MHCLG) published a consultation seeking views from the public on the UK Government’s new 'Right to Regenerate' proposals. Under the proposals, the public can turn vacant plots and unused buildings into community spaces or new homes. The right also covers publicly owned (and unused) social housing and garages, extending the property range the public can transform. Public bodies that own vacant or unused land and have no clear plan for its use would be required to sell it under the right. 

While making the announcement, Housing Secretary Robert Jenrick said the Right to Regenerate was the government's way of helping communities to make better use of available and derelict resources, with the right expected to cut the red tape associated with these efforts. He also noted that unless there is a good reason not to sell land, this option would be the default one to enable public land to be used for the greater good. 

The Chief Executive of the National Community Land Trust Network, Tom Chance, welcomed the proposal, noting that it would help communities turn neglected assets into usable resources. Mr Chance also highlighted how access to land at affordable prices was a barrier for many community land trusts in the country. The new right could make it easier for communities to play a leading role in changing this situation. Ian Harvey, the Executive Director of Civic Voice, saw the proposal as a great step forward in helping communities implement viable ideas for empty land. 

The Right to Regenerate could benefit members of the public, including property developers such as Zuneth Sattar, who wish to turn unused spaces into housing options that help the community. Mr Sattar has recently broken ground on the development of a block of flats and looks to make this type of work the ultimate goal of his property business. 

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Public Consultation 

The public land that the Right to Regenerate seeks to address includes land and property owned by English borough, district and county councils, development corporations owned by local authorities, combined authorities, and other bodies such as police forces. The consultation period (which was open until the 13th March 2021) helped clarify issues such as the definition of underused or unused property, the range of public bodies covered by the right, a potential right of first refusal for the person making the first request, and transparency requirements for the entire process. 

The Right to Regenerate is the government's attempt to revamp the current 'Right to Contest,' a similar scheme that allows members of the public to apply to the government to sell a property that is underused or can have a better economic impact. 192 requests have been made since 2014, with the majority focusing on small plots of land. Additionally, those who make the request don't receive the right of first refusal before the property goes on the open market. This, the ministry points, is among the main reasons why members of the public are hesitant to use the right in its current form. 

Encouraging the development of brownfield land is among the government's goals in proposing the new right, making it easier for the public to challenge public organisations and councils to release land that can be put to better use. In reality, a member of the public with a council-owned plot of land at the back of their residence could use the Right to Regenerate to make a request and potentially get the right of first refusal to purchase the plot and redevelop it. 

Additional measures to be deliberated upon during the consultation period include requiring councils to submit quarterly reports on preliminary enquiries, producing physical and electronic notices when requests are made, and publishing all requests (and their outcomes) on councils' websites. 

COVID-19’s Effect on House Prices

Worldwide, the social and economic impact of the COVID-19 pandemic was visible. In the UK, virus mitigation measures hurt the economy, and each passing week in the pandemic’s early months brought news of job losses. However, while initially following the downward trend experienced by most economic sectors, the housing market has seemingly been immune to the crisis. Indeed, after the housing market reopened in the summer of 2020, increased prices and market activity have highlighted the sector’s performance. 

The positive performance has its foundation in the surge of pent-up demand experienced after the UK’s initial lockdown. The rebound was further boosted by the UK Government’s stamp duty holiday announcement in July 2020, which is expected to end in March 2021. Buyers eager to take advantage of this tax cut rushed to get mortgage approvals, which the Bank of England said rose by 22 percent in the third quarter of 2020. By October 2020, annual house price growth rates had reached their highest level since the mid-2010s. 

Even after subsequent lockdown measures to reduce the coronavirus’s spread, the property markets in England, Northern Ireland, Scotland, and Wales remain open. This is good news for estate agents, buyers and investors, who can undertake house viewings and facilitate home moves. As a result, the overall transaction numbers have increased, with provisional HMRC data showing property sales up 19 percent year-on-year in December 2020.  

The positive momentum is expected to continue in 2021, as observers expect a surge in activity in the first quarter before the stamp duty holiday ends. Afterwards, a host of factors are likely to lead to a gradual slowdown in housing activity. A review of the Help-to-Buy scheme is one of them, as is the overall economic recovery. The ending of mortgage payment holidays and policy support schemes for workers are other events that will have a downward effect on the market. 

Is It the Best Time to House Hunt? 

As residential property investor Zuneth Sattar knows, timing is essential. Encouraged by the savings from the stamp duty holiday and an increased preference to work from home, many potential homebuyers are considering getting on the housing ladder. According to property analysts, there is no harm in looking around as the market balance is unlike anything seen in years. As many people consider their choice of abode and moving out of the big cities, there’s an adequate amount of stock to view. 

For buyers, the availability of options means there is no pressure to make snap decisions on a property. The downside is that there is a possibility of many like-minded individuals looking to buy, so long wait times on the legal and financial aspects of the purchasing process are expected. 

Some are hesitant to buy a property in the current environment. Their concerns are primarily financial, which is why it is important to have a clear baseline of what’s affordable. Personal circumstances will dictate whether an individual can proceed with the process. For those with a deposit – perhaps even boosted by additional savings as a result of lockdown – and job security, taking advantage of low interest rates could turn out to be a good decision.  

2020 House PriceStatistics

Market Predictions 

The optimism around the housing market is expected to continue, even though there is divided opinion on whether it will last into the latter parts of 2021. The estate agents Hamptons and Savills believe house prices will stay put in 2021, while Rightmove forecasts a four percent growth in the year. Zoopla foresees growth reaching five percent before falling to one percent by the end of the year, while Halifax predicts a fall by as much as five percent. 

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