Queen’s Speech 2016 - planning ahead for the property sector

Following the Queen’s Speech, Samantha Blackburn, head of residential property law at Slater and Gordon (UK) LLP, says it’s not surprising, in light of the impending EU referendum and the uncertainties over what a Brexit may entail, that the government did not spring any surprises on property practitioners.

What were the key announcements in the Queen’s speech affecting property practitioners?

The main points to note are:

  • the government’s intention to privatise the Land Registry—despite fierce opposition proposals will be published in response to the recommendations of the Law Commission’s report (2011) on easements, covenants and profits-à-prendre, with a view to introducing a draft Law of Property Bill
  • commitment to introducing a new Electronic Communications Code to simplify rules for building broadband infrastructure, which will be brought into effect under the Digital Economy Bill
  • introduction of measures under the Neighbourhood and Infrastructure Bill (NIB) to reform and speed up the planning process
What legislation has been announced regarding the Land Registry? Will this legislation, as suggested by the government, benefit customers?

The proposed privatisation of the Land Registry will be done through NIB. Both property practitioners and the general public have their concerns and this is evidenced by over 200,000 signatures to the 38 degrees petition to stop privatisation.

Practitioners are concerned that the overriding aim to make profit will result in increased costs, a fall in standards for an already overstretched service and more barriers between practitioners and their need for an efficient and accessible service to important property and land data.

Were there any announcements regarding home building?

Yes, the government announced its aim to build one million new homes by planning to launch a £3bn home building fund. This will support the construction of 160,000 to 200,000 homes over the long term with particular emphasis on small developments.

In addition, there are a number of planning reforms to be introduced by NIB including:

  • giving more power to local people through the neighbourhood planning process and improving the process for reviewing and updating plans
  • making sure that local planning authorities impose pre-commencement conditions only where absolutely necessary—excessive use of such conditions is considered to slow down and delay development after the grant of planning permission
  • making the compulsory purchase order process clearer, faster and fairer
What is the significance of the draft Law of Property Bill? What proposals do you imagine will be included? How might this simplify the law around land ownership?

The government wants to simplify the law regarding land ownership with a view to introducing a draft Law of Property Bill. The Law Commission published its report in 2011 with suggestions on simplifying and modernising the law relating to easements, covenants and profits-à-prendre.

Easements—a bit of a headache

Property practitioners are well aware that the law relating to covenants and easements is archaic, complex and that it can be problematic in practice. Take easements for example, which can be express, implied, or which can arise by prescription by no less than three different methods—one of which is based on enjoyment since 1189. The Prescription Act 1832, introduced to try to simplify uncertainties, is commonly regarded as the most badly drafted piece of legislation and ripe for reform—a common essay question for law students. In particular, it is the acquisition of rights to light by prescription, which has notoriously proved to be a major headache for developers, especially when they are seeking to develop in built-up urban areas.

The Law Commission recommends that there should be only one statutory scheme for the acquisition of rights by prescription based on 20 years’ continuous ‘qualifying use’. Qualifying use would need to be on the basis that the use was without force, stealth and permission. This is already a well-established legal concept. To abolish prescription entirely would be an unpopular option and simplification of the rules is welcomed—particularly in the light of the cases arising from rights to light issues.

The Law Commission does, however, make one special recommendation in the context of the Custom of London which applies within the boundary of the City of London. This permits building to any height regardless of infringement of rights to light. It can in certain circumstances prevent the acquisition of a right to light by prescription. The Law Commission’s opinion is that rights to light created under the new statutory scheme remain subject to any local usage or custom which currently exists. I think that practitioners would welcome reform in relation to easements.

Covenants—enforceable or not—that is the question

Any practitioner is only too aware of the problems with enforceability of covenants and the use of complicated legal mechanisms or a chain of indemnity covenants to secure performance of positive obligations by successors in title. The Law Commission is recommending the creation of a land obligation which would be a new legal interest which could be positive or negative in nature. It would be possible to register both the benefit and burden at the Land Registry. A key departure from the current law would mean that the original parties to the land obligation would not remain liable for breaches of the obligation occurring after they have parted with the land. It remains to be seen how this proposal will be carried forward but simplicity is welcomed.

Were there any surprising omissions?

I don’t think so in view of the current political uncertainty surrounding the EU referendum. The intricacies of the High Speed Rail (London-West Midlands) Bill have been introduced to the House of Lords and it will be interesting to see what happens.

Is there anything lawyers and their clients should do in the light of the announcements?

There is nothing to make lawyers stand by their beds for inspection and immediate action just yet. We will have to wait and see what happens on privatisation of the Land Registry. The proposals for reform of third party land rights have been rumbling on for some time and we will have to see what proposals are suggested.

What are the trends? Do you have any predictions for the future?

I think there will be continued pressure to build new homes, but the major concern is that a Brexit could have an adverse impact on investment in the UK economy and bank lending. One consequence could be that there will be less investment available through government backed schemes, such as Help to Buy, which was introduced to help both developers start building again and first-time buyers to get on the housing ladder. The Housing and Planning Act 2016 has now received Royal Assent and we will have to see what happens regarding starter homes and ‘permission in principle’ as the flesh is put on the bones through the introduction of regulations.

The area of third party rights over land and land registration reform is an area that has been ripe for reform for some time but I do think it will take some more time to finalise.

What does the Digital Economy Bill (focusing on telecommunications) mean for property lawyers?

I don’t mean to sound flippant, but it will entail more negotiations regarding rights to install telecommunications apparatus and rights of way and, no doubt, new codes of practice.

Samantha Blackburn works in all areas of commercial and residential property law. This includes acting on sales and purchases, secured lending work, the preparation of development agreements and landlord and tenant matters. Samantha has acted for the Homes and Communities Agency and the Highways Agency as well as social housing providers and private sector developers, banks and a number of businesses in the oil and chemicals sector. She has also handled cases for a number of private individuals buying and selling residential property along with drafting the documents establishing residential developments.

Interviewed by Kate Beaumont.

The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

 

 

 

Filed Under: Planning , Property

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