The UK's prime minister Sir Keir Starmer is fighting for his political life but the King's Speech, which outlines his government's legislative plans for the next year, took place as normal. It was met with immediate criticism from a UK real estate sector more concerned by the uncertainty over the leadership of Starmer's government.
The address is written by the government and read by the reigning monarch in the House of Lords. It was delivered at 11:30 today as Starmer battles to stay on as prime minister after a dismal showing by the Labour Party at the recent local council elections.
Four members of his government, including Home Office minister Jess Phillips, have resigned in the past 24 hours, and more than 100 Labour MPs are publicly calling for him to quit. The BBC is reporting that Health Secretary Wes Streeting's allies expect him to launch a leadership challenge tomorrow.
For real estate professionals already seeing transactional activity pausing in response to the Iran war and its likely inflationary impact on energy prices and interest rates, the uncertainty is causing alarm.
In particular, there are concerns that Starmer, a centrist, will be replaced by a politician from the left of the Labour Party. Jamie Dimon, the chief executive of American bank JPMorgan, has warned he may terminate plans to build a new £3 billion UK headquarters at Canary Wharf if Starmer is replaced by a prime minister who is hostile to banks. Earlier this year CoStar News revealed JP Morgan was seeking business rates tax breaks for the move.
The King's Speech outlined 37 bills minsters want to pass in the next parliamentary session, including eight that have already been introduced to Parliament.
Among the most meaningful for real estate include the much-trailed and debated Commonhold and Leasehold Reform Bill which will ban the use of leasehold for new flats in England and Wales, and cap ground rents at £250 per year. A Social Housing Renewal Bill plans to exempt newly built social homes in England from the Right to Buy scheme for 35 years. Powers to make construction product manufacturers pay towards removing unsafe cladding from buildings form part of a new Remediation Bill.
The Northern Powerhouse Rail Bill will outline a new proposed route from Manchester to Millington in Cheshire, via Manchester Airport, while an Energy Independence Bill will introduce new energy efficiency requirements for rented homes. The Steel Industry (Nationalisation) Bill will give ministers new powers to fully nationalise British Steel, and a European Partnership Bill introduces powers to fast-track legislation to deliver new agreements planned with the EU. A Regulating for Growth Bill will allow for pilot schemes to bolster innovation in areas like defence technology and AI-controlled ships.
Melanie Leech CBE, interim chief executive, Real Estate:UK, said the annual address had come as the real estate industry is facing "numerous significant headwinds, and construction is at a standstill across most of the country because it is not viable to build". But Leech was most critical of the uncertainty and infighting at the top of the Labour Party and the effect on business decisions.
"In these circumstances, whilst the UK remains a preferred destination for both domestic and global capital, investors are unwilling to commit new funds without greater economic and political stability including clear signals from the Government that they will take the necessary steps to bridge the viability gap, reduce the costs of development and deliver on the promise that the UK will ‘build, build, build’. Sadly, a combination of last week’s local election results changing the landscape and bringing uncertainty in many areas, and the ongoing speculation about leadership, means that the reverse is true."
Leech said there are welcome measures in the King’s Speech, particularly the intent to speed up grid connections, but added that the government has not set out the "bold vision for economic and social renewal that is needed and that will unlock investment".
Leech added: "Indeed, investors may be further discouraged by the focus on measures such as leasehold reform and retentions within the construction sector.”
The Royal Institution of Chartered Surveyors was more inclined to welcome much of the content. In a statement it 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. RICS also welcomes further action to support residents living in buildings with unsafe cladding, and delivering meaningful reforms for leaseholders.
"Delivering on these ambitions will require close collaboration between government and industry, as well as the professional expertise needed to turn policy into practical outcomes. RICS continues to work with the UK Government to drive forward crucial measures that will improve the built and natural environment and outcomes for professionals and consumers.”
Bindu Pokkyarath, director of economics at Pegasus Group, said a consistent thread running through the 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.
“Regulators are being asked to support growth more explicitly, alongside their core duties. Water, energy and transport are being treated as enablers of housing and economic development, not just utilities. Local and mayoral leadership is given a stronger role, including new powers to raise and reinvest revenue locally.
“For Combined Authorities, councils and delivery bodies, the Speech is clearly encouraging to bring forward joined‑up investment propositions – where housing, infrastructure and economic outcomes are planned together rather than sequentially. The question now for places is not whether growth is supported in principle, but whether delivery structures, funding models and governance are ready to respond at pace.”
Andrew Bulmer, chief executive officer of The Property Institute, the professional body for residential property management, described the Commonhold and Leasehold Reform Bill as a "once in a generation opportunity to change the way we own and manage flats in England and Wales".
Bulmer added: "Commonhold and a reformed leasehold will bring greater self-governance to flat owners, who will enjoy new rights but also take on new legal responsibilities, including building safety, company administration and financial governance."
But 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, managing people’s safety in their homes and millions of pounds in their greatest assets, yet with zero bar to entry. But, with the right safeguards in place, we know it can work."