Property sector backs King’s Speech growth agenda but sounds alarm on leaseholder overhaul

The real estate sector has broadly welcomed the government’s focus on infrastructure, housing and economic growth in today’s King’s Speech, though proposals around leasehold reform and building safety prompted warnings over investor confidence, market disruption and delivery risks.

The speech placed housing, infrastructure and energy security at the centre of the government’s legislative agenda, with proposed measures including a Social Housing Renewal Bill, a Commonhold and Leasehold Reform Bill and a Remediation Bill aimed at accelerating cladding remediation works.

Industry figures said the package signalled a more interventionist approach to economic growth, linking housing and infrastructure delivery more closely to wider economic security.

Bindu Pokkyarath, director of economics at Pegasus Group, said: “A consistent thread running through today’s King’s Speech is the idea that economic security is rooted in place performance.

“Across multiple Bills, the government links growth not simply to spending, but to how effectively infrastructure, regulation, and housing work together at a local level.”

Pokkyarath added regulators were increasingly being asked to support growth alongside their core duties, while water, energy and transport infrastructure were being treated “as enablers of housing and economic development, not just utilities”.

“It is clearly encouraging places to bring forward joined-up investment propositions – where housing, infrastructure and economic outcomes are planned together rather than sequentially,” she said.

The inclusion of legislation to support airport expansion, Northern Powerhouse Rail and the Lower Thames Crossing was also welcomed by the sector.

A spokesperson for RICS said: “It was great to see the built and natural environment feature prominently in the King’s Speech, with a number of important measures that have the potential to support economic growth and improve outcomes for communities across the UK.

“It was also encouraging to see commitments on major infrastructure projects through the Civil Aviation Bill, Highways (Financing) Bill and Northern Powerhouse Rail Bill, recognising the vital role infrastructure plays in supporting the wider economy.”

However, the government’s proposed overhaul of leasehold and commonhold drew mixed reactions across the property industry.

The planned Commonhold and Leasehold Reform Bill will seek to ban the sale of new leasehold flats, make commonhold the default tenure and cap ground rents for existing leaseholders.

Andrew Bulmer, chief executive of The Property Institute, described the Bill as “a once in a generation opportunity to change the way we own and manage flats in England and Wales”.

He added: “Greater resident empowerment and independence is a worthy ambition but it must not get ahead of protecting those owners from an unregulated sector.”

Bulmer called for mandatory qualifications and stronger regulation for property managers, arguing that more empowered leaseholders and commonholders would still require “competent, qualified professional property managers”.

Others warned the reforms could undermine investor confidence and create wider market instability.

A spokesperson for the Residential Freehold Association said the proposed ground rent cap represented “a wholly unjustified interference with existing property rights”.

The organisation added: “If enacted, [it] would seriously damage investor confidence in the UK housing market and send a dangerous and unprecedented signal to the wider institutional investment sector.”

According to the RFA, retrospective ground rent caps could force professional freeholders out of the sector while doing little to address wider issues around service charges and management standards.

Sim Sekhon, group chief executive at Legal for Landlords, said: “Leasehold reform may benefit homeowners, but the government’s real challenge is delivering fairer protections without undermining investment confidence or triggering wider financial consequences across the housing market.”

Several legal and advisory experts also questioned whether the reforms could realistically be implemented within this Parliament.

Linz Darlington, managing director of lease extension specialist Homehold, said: “For many, this Bill will feel like déjà vu.”

Darlington noted key elements of the previous government’s Leasehold and Freehold Reform Act 2024 had still not been implemented.

“Leaseholders with short leases and high ground rents are suffering; in many cases they are stuck in flats they cannot mortgage or sell,” he said.

“Implementing the 2024 Act is an urgent repair to the shaky foundations of the existing system. This new Bill is a luxury extension distracting from the job at hand.”

The government’s continued focus on building safety and remediation was largely welcomed, though several industry figures questioned whether legislation alone would accelerate delivery.

Andrew Parker, head of construction disputes and building safety at Forsters, said: “The industry is in need of better collaboration and engagement from those designers, contractors and sub-contractors who are responsible for many of the problems being faced.

“A Bill may help focus minds and signal the government’s intent, but is unlikely on its own to make the difference that is hoped.”

James Morris, partner at Mayer Brown, added that “legislation alone is unlikely to be sufficient”, citing issues including inconsistent remediation approaches, market capacity constraints and delays linked to the Building Safety Regulator.

Sián Hemming-Metcalfe, operations director at Inventory Base, said the success of reforms would ultimately depend on delivery rather than further regulation.

“Building safety reform will ultimately be judged not by the number of new regulations introduced, but by how quickly unsafe buildings are actually remediated and returned safely to residents,” she said.

“The challenge now is less about announcing further reform and more about making the machinery of delivery work in practice.”

Meanwhile, property lawyers highlighted the complexity of transitioning away from the traditional leasehold system.

Caroline Wild, counsel in the real estate disputes team at Forsters, said: “With leasehold reform now politically inevitable, any forthcoming Bill is likely to represent one of the most significant overhauls of property ownership for generations.

“However, while the political intent is clear, the government still faces a considerable challenge in balancing the competing interests at play.”

She added unresolved legal challenges to the Leasehold and Freehold Reform Act 2024 added “a further layer of uncertainty” to the wider reform programme.

Alistair Watson, UK head of planning and environment at Taylor Wessing, said that, in summary, the Speech showed central government had “not done enough to bring planning law and policy together” and that deregulation needed to go “further and faster”.  

“If you want to go fast, go alone. If you want to go far, go together,” he said. 

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