Conservative Manifesto – BPF Analysis

The Conservative and Unionist Party manifesto launched on Tuesday 11 June 2024. We take a look below at some of the Key proposals from Prime Minister Rishi Sunak's party including on housing and planning, communities, net zero and more.

Housing and Planning Policy

The manifesto commits the Conservatives to deliver 1.6 million homes in England in the next Parliament by:

• Increasing to the threshold at which first-time buyers pay Stamp Duty to £425,000 from £300,000.
• Developing a new and improved Help to Buy scheme to provide first-time buyers with an equity loan of up to 20% towards the cost of a new build home. First-time buyers will be able to get onto the housing ladder with a 5% deposit on interest terms they can afford. The scheme will be part funded by contributions from house builders.
• Continuing the Mortgage Guarantee Scheme and shared ownership and retain Right to buy.
• Granting a two-year temporary Capital Gains Tax relief for landlords who sell to their existing tenants.
• Delivering homes on brownfield land in urban areas by providing a fast track route through the planning system for new homes in the 20 largest cities, with strong design codes, new family homes and mansion-blocks on treelined streets built in the local character. They will look at extending ‘full expensing’ to the delivery of brownfield housing.
• Raising density levels in inner London to those of European cities like Paris and Barcelona. Ensure the London Plan delivers more family homes a year, forcing the Mayor to plan for more homes on brownfield sites, like underused industrial land. Regenerate major sites like Euston, Old Oak Common and Thamesmead.
• Unlocking new urban regeneration schemes, by creating locally-led urban development corporations in partnership with the private sector and institutional investors. The Conservatives will support the delivery of new quarters in Leeds, Liverpool and York and work to the Cambridge 2050 plan.
• Supporting local and smaller builders by requiring councils to set land aside for them and lifting Section 106 burdens on more smaller sites, while ruling out Labour’s proposed ‘community right to appeal’.
• Making sure local authorities use the new Infrastructure Levy to deliver the GP surgeries, roads and other local infrastructure needed to support homes and not allow these funds to be spent on unrelated community projects.
• Retaining the commitment to protect the Green Belt from uncontrolled development, while ensuring more homes get built where it makes sense, like in inner cities. National planning protections for the Green Belt will remain in place.
• Completing the process of leasehold reform; cap ground rents at £250, reducing them to peppercorn over time; and end the misuse of forfeiture so leaseholders don’t lose their property and capital unfairly and make it easier to take up commonhold
• Passing a Renters Reform Bill that will deliver fairness in the rental market for landlords and renters alike; and deliver the court reforms necessary to fully abolish Section 21 and strengthen other grounds for landlords to evict private tenants guilty of anti-social behaviour.
• Continuing support for leaseholders affected by historic building safety problems by requiring the continuation of developer funded remediation programmes for mid- and high-rise buildings.
• Giving councils powers to manage the uncontrolled growth of holiday lets.
• Supporting those who want to build or commission their own home by making the planning process simpler, while also supporting more community housing schemes
• Encouraging the building of different forms of housing, particularly housing for older people.
  
  

BPF analysis

Headline measures

While the abolition of Stamp Duty up to £425,000 and a new Help to Buy scheme will help affordability for some, the manifesto is missing a clear plan on how supply will be increased across all tenures and the whole country over and above building in the inner cities. The concern remains that these measures boost demand and thus prices without a corresponding response in supply.

Planning for Housing

The BPF strongly supports the aspiration to deliver more homes through brownfield development. We would also argue that this approach could be expanded beyond the 20 largest cities identified to make sure all of our most populous towns and cities are delivering the homes that are needed.

The focus on accelerating the planning process for housing is welcomed however what is more important is making sure planning decisions for all forms of development, including commercial, are sped up. This will only be able to be achieved if both the public and private sector makes sure local authorities get the resources and upskilling they need.

Raising density in appropriate locations across London is welcomed – it will be important that new urban communities brought forward not only deliver more housing but also commercial development that supports jobs and successful placemaking.

Reference in the manifesto to ‘underused industrial land’ in London is concerning and points to a fundamental misunderstanding of how our major cites work with the need for housing and employment space to exist in proximity. All current evidence points towards our capital city needing more industrial space in the future to meet London’s population and business growth needs.

Locally-led urban development corporations are something that the BPF supports, subject to certain caveats, as we set out in a response to a recent government consultation on the subject.

We are supportive of efforts to encourage the development of smaller sites.

The BPF has consistently made the case against introducing a post permission third party right of appeal as a matter of principle, for sound and justified reasons in that it will lead to more decisions being made centrally instead of locally, allowing competing commercial interests to frustrate development, potentially leading to confrontation between one part of a community and another, and potentially clog up the already under-resourced planning system

Planning contributions

The BPF has consistently also argued that the Infrastructure Levy will not work in practice and lead to a more complex system that will slow the development process and undermine the timely delivery of associated infrastructure, resulting in increased uncertainty throughout the planning system. A more effective approach would be to look to improve the current system of developer contributions through reform to S106 and CIL as recommended in the CIL Review in 2017.

Reference to the principle that developer contributions should only be spent on infrastructure and mitigating the impact of development is a welcome inclusion in the manifesto. Developer contributions should solely be spent on mitigating the impact of development and infrastructure provision and should not be used to plug other gaps in local authority spending, as we set out in our own planning manifesto.

Green Belt development

We recognise that reference to development in the Green Belt provokes strong reactions and that debate is often polarised. The reality is that the extent of the Green Belt has reached well beyond that originally designated, including land that is of poor quality and does not provide for wider recreational needs and public access. Much could be developed without harm to the Green Belt’s original intentions or giving rise to urban sprawl. 

We need to have a new conversation about the Green Belt which is qualitative and moves beyond an obsession with protecting historic boundaries, so we can meet modern needs. This should include looking again at ‘grey land’, not just brownfield but land that is despoiled and poor quality.  Often these sites may be a blight. But with many lying close to transport links, they could play a vital role in easing our housing crisis, whilst making best use of existing infrastructure in a manner that contributes to a sustainable pattern of development.

Leasehold and rental reform

We support the approach to renters' reform. It is really important that abolition of s21 is done thoughtfully, accompanied by court reform, to maintain investment in the sector. On leasehold reform, we worry that broad political statements do not match the practicalities of delivery. You can only move away from leasehold if there is a working alternative. Capping ground rents in such a broad-brush way is fraught with consequences that impact on leaseholders and freeholders.

Communities and Local Government

The manifesto states that: “We have already allocated and will ensure we deliver over £15 billion in dedicated levelling up funding across the UK since 2019 and passed our landmark Levelling Up and Regeneration Act. We have saved more than 330 pubs, sports clubs, arts venues and other precious community spaces through our Community Ownership Fund and we have unlocked the promise of thousands of jobs with 12 Freeports. To further strengthen communities, we will:

• Provide 105 towns in the UK with a £20 million endowment fund for local people to change their town’s future. This includes extending our plan to 30 more towns who will benefit from funding that they can use on their priorities such as reviving high streets or bringing new housing to town centres.
• Extend our Community Ownership Fund to help more communities across the UK take control of vital community assets like pubs, music venues, libraries, green spaces, leisure centres and more.
• Extend the UK Shared Prosperity Fund for three years at the next Spending Review, before using this funding to support UK wide National Service. Both schemes will involve funding community groups focused on increasing life chances, instilling civic pride and boosting people’s skills.
• Create more Freeports and Business Rates Retention zones. Freeports have already generated just under £3 billion in investment, which in turn will create thousands of jobs. We will extend this opportunity to more areas and set out an application round in the next Parliament.
• We want to replicate the example of Sunderland’s Crown Works Studios elsewhere in the country. We will enable councils to retain all business rates growth within a defined zone for 25 years, which they can use to finance the delivery of new infrastructure and invest in supporting burgeoning local industries.
• Continue backing Investment Zones across the country, giving areas £160 million to catalyse local growth and investment.
• Give our high streets a new lease of life and restore pride in place. We will change planning laws to support places to bring back local market days and regenerate defunct shopping centres.
• We will continue to make industry pay for removing chewing-gum from streets and raise the fines utility firms must pay when they create ‘street scars’ by not properly restoring roads and pavements after their works are completed. We will make fly tipping an offence that carries penalty points against your driving licence.
• Empower communities through devolution and new powers. By 2030, every part of England that wants one will have a devolution deal.
• We will offer our ‘level 4’ devolution powers to areas in England with a devolution deal and a directly elected leader, starting with the Tees Valley.
• Launch a Seaside Heritage Fund to support enhancements to our seaside heritage, preserving and restoring our coastal assets.
• We will ensure councils provide high quality and value for money services to local communities. As part of this, we will protect residents from excessive council tax rises by ensuring that local people have the final say on council tax; and we will ban the ‘four-day working week’ in local authorities.
• We will improve standards in councils by making their performance more transparent through the Office for Local Government. We will always stand behind councils and look to recognise the unique circumstances of coastal areas in the allocation of grant funding to local authorities, alongside providing fairer funding for rural areas through the Rural Services Delivery Grant."

BPF analysis

We support the ‘Long Term Plan for Towns’ – longer term funding that can be used more flexibly is a better approach than ad hoc bidding for specified, time-limited, projects, although neither are a better substitute for properly resourced councils.

The continued commitment to Investment Zones is welcome, but it is not clear whether the £160m funding is new or previously committed.

Finally, we welcome further devolution to metro mayors and combined authorities. This regional scale is the right one to lever major sources of capital for new real estate and regeneration projects.

The Economy

The party says it will “[c]ontinue to ease the burden of business rates for high street, leisure and hospitality businesses by increasing the multiplier on distribution warehouses that support online shopping over time.”

BPF analysis

The proposal to shift some of the burden of business rates onto warehouses misses the point, which is that the overall burden of business rates is simply too high for everyone. What we need is more frequent revaluations to ensure that rates bills better track property values and to de-couple business rates from inflation to make the tax more sustainable.

Furthermore, this measure is unlikely support retailers on our high streets. Given many retail businesses are now ‘omni-channel’ – their online presence supports their physical stores and vice-versa - this would simply shift the tax burden within the retail sector. The business rates system is already designed to tax more valuable properties more and lower value properties less – we just need re-valuations to be carried out more frequently to make sure that this redistribution of the tax burden happens more quickly.

Net Zero and Nature

The Manifesto states that the Party remains committed to delivering net zero by 2050 but will deliver this in a “pragmatic and proportionate” way.

It commits to increasing investment in renewables, including a trebling of offshore wind capacity over the next Parliament and scaling up nuclear power.

In terms of specific commitments of most interest to BPF members, the Party state that they will:

• Cut green levies on household bills;
• Rule out creating further green levies;
• Invest £6 billion in energy efficiency over the next three years to make around a million homes warmer, and fund an energy efficiency voucher scheme to support the installation of energy efficiency measures and solar panels;
• Implement the recommendations of the Winser Review, ensuring networks are able to buy forward with confidence and cut waiting times to get a grid connection;
• Abolish the ‘nutrient neutrality’ rules, with developers required to pay a one-off mitigation fee so there is no net additional pollution; and
• Reform the Climate Change Committee to give it an explicit mandate to consider cost to households and UK energy security in its future climate advice.

BPF analysis

The manifesto broadly reflects the Government’s current position on net zero and nature. There are no surprises here.

The sector is looking for clarity on what net zero will mean for the built environment – in terms of policy and regulation – but the Manifesto does not provide this, and there is very little directly relevant to commercial real estate.

The abolition of the ‘nutrient neutrality’ rules is welcome, although we would want to understand more about the one-off mitigation fee.

The Committee on Climate Change is a valuable source of information and expertise, and a key part of the UK’s net zero landscape. The Committee’s reports and advice on decarbonising buildings are highly valued by the sector. We would not want to see its independence undermined.

Find out more about our work leading up to the general election, including our media statements and manifestos, here.

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