BPF Spotlight Series: English Devolution and Community Empowerment Bill
đź’ˇ Devolution on the horizon, but rent reviews in the spotlight.
In our latest BPF Spotlight, our Director of Policy Ion Fletcher unpacks the English Devolution and Community Empowerment Bill - from the opportunities greater regional powers could unlock, to the risks posed by a sudden ban on upward-only rent reviews (UORRs). Over to you, Ion:
âť“Why does the sector need to take note of the English Devolution and Community Empowerment Bill?
🗣️ The Bill will give more powers to regional government to decide what type of development should happen where on their patch. Done well, it could provide more confidence and clarity to developers. The Bill also bans UORRs, a mechanism common in longer commercial leases that provides predictability of income to investors and developers.
âť“You recently took part in the evidence session with the Bill Committee, what were the main points you raised in that discussion?
🗣️ Firstly, we’re very disappointed with how the UORR ban was included in the Bill without any prior consultation. Property investment thrives on certainty and changing the rules of the game without any notice is not conducive to attracting investment into our towns and cities. Despite the Government’s rhetoric, the ban will do little to help empty shops on high streets, which are far more affected by unsustainable business rates and lack of demand.
By providing predictability of income, UORRs can de-risk development and refurbishment work, as well as the construction jobs they support. Banning UORRs adds more uncertainty at a time when development viability is hugely challenging. However, we support the Bill’s broader aims around devolution, which our members have mostly had good experience with.
âť“What are the timescales for the Bill's passage through Parliament - when might it become law?
🗣️ Parliamentary timings are a bit of a dark art, but we’re likely to see the Bill move from the Commons to the Lords as we near Christmas - and then back to the Commons towards the end of Q1 next year. It could become law by Spring.
âť“What's next for the BPF in relation to the Bill?
🗣️ We’ll encourage the Government and Parliament to consider restricting the scope of the UORR ban to those sectors where it’s perceived to be more of an issue – that way we minimise any unintended consequences. We’ll also highlight the role of “caps and collars” associated with index-linked rents.
