Real estate: What's on the horizon for 2014 and beyond?

Real estate: What's on the horizon for 2014 and beyond?

Published:

Author: Sally Newton

We take a look at the changes that anyone working in real estate can expect to see in 2014.

JANUARY

  • RICS Red Book - the RICS has published the latest edition of its mandatory standards manual for valuations, RICS Valuation - Professional Standards January 2014 (the Red Book). The RICS material included in this edition of the Red Book takes effect from 6 January 2014 and applies to all valuations where the valuation date is on, or after, that day. The new edition is the culmination of a comprehensive review of the content, framework and format of the 2012 and earlier editions. It also includes new material relating to business valuation and intangible assets. The definition of Market Value is now in Valuation Practice Statement 4.1.2.
  • Community Infrastructure Levy (CIL) changes - draft regulations were published in December and are expected to come into force by the end of January. A number of important changes will be made including a relaxation of the 'vacancy test' for discounting existing buildings, and changes to the rules in relation to rate setting, phasing of payments, payments in kind and social housing relief. For further information on the proposed changes, or any question in relation to CIL, please contact a member of our Planning team.
  • CRC Energy Efficiency Scheme - the CRC Scheme is a mandatory emissions trading scheme for large businesses and public sector organisations in the UK. It came into force on 1 April 2010. The scheme is divided into seven phases and on 31 March 2014, the First Phase of the CRC ends. The subsequent phase, which used to be known as 'Phase 2', but is now known as the 'Initial Phase', commences on 1 April 2014 and runs to 31 March 2019. The registration period for the Initial Phase of the CRC Scheme opened on 4 November 2013, and those affected have until 31 January 2014 to register with the Environment Agency.┬áThere have been some changes to CRC since the First Phase.

MARCH

  • Changes to Land Registry fees - the Land Registration Fee Order 2013 comes into force on 17 March 2014. It will apply to all applications received at Land Registry offices on or after 17 March. The Order introduces a 50% reduction in fees for certain applications which are delivered electronically.

APRIL

  • Commercial Rent Arrears Recovery (CRAR) - the Taking Control of Goods Regulations 2013 come into force on 6 April 2014 and are being introduced in substitution for the remedy of distress. The regulations set out the procedure for CRAR and also the procedure that bailiffs must follow when taking control of and selling goods to recover a debt, in accordance with Schedule 12 of the Tribunals Courts and Enforcement Act 2007.
  • Changes to capital allowances - the transitional period for the capital allowances pooling requirement expires in April 2014. This means that in relation to any sale taking place on or after 1 April 2014 (for corporation tax) or 6 April 2014 (for income tax), if the pooling requirement applies to the sale, it must be satisfied for the buyer to become entitled to claim allowances on the fixtures.
  • Abolition of the Office of Fair Trading (OFT) - the OFT will be abolished on 1 April 2014 and its consumer law enforcement functions transferred to other bodies. The OFT's functions under the Estate Agents Act 1979 will transfer to Powys County Council, whose Trading Standards Service will provide these functions for the UK. The OFT's supervisory functions in respect of estate agents under the Money Laundering Regulations 2007 will transfer to HMRC. Responsibility for regulation of second and subsequent charges will transfer from the OFT to the Financial Conduct Authority on 1 April 2014 (the FCA is already responsible for the regulation of first charges).
  • Reforms to the listed building consent regime - these reforms are aimed at reducing the number of listed building consent applications and are due to take effect on 6 April 2014. In December 2013, a consultation opened on the draft secondary legislation, which contains the procedural detail.

OCTOBER

  • Construction (Design and Management) Regulations 2007 - work is underway to simplify these Regulations, but the revised package of regulations (which will include a new statutory instrument and Approved Code of Practice (ACoP)) is still awaited. The target date for implementation is currently October 2014.

MORE TO COME - DATES NOT YET KNOWN

  • Telecoms Code reform - in February 2013 the Law Commission published its report recommending how the Electronic Communications Code, which regulates the legal relationship between landowners and telecoms operators who install telecoms apparatus on their land, should be revised. The government is now to draft a bill to implement the changes. The Law Commission advised that the revised Code should be a complete redraft, not a mere amendment of the existing Code. Two Shoosmiths' partners, Andrew Farmery and Zoe Wright, worked with the Law Commission in relation to their review of the Telecoms Code, and then discussed the recommendations with Department of Culture Media Sport. DCMS were hoping that the changes could be put in front of Parliament in October 2013 but having missed that deadline, the next opportunities are in April 2014 or October 2014.
  • High speed rail link (HS2) - the Government continues to press ahead with HS2. In late November 2013, following the enactment of the High Speed Rail (Preparation) Act 2013, the Government published the High Speed Rail (London-West Midlands) Bill 2013-14. The HSR Bill contains various powers that will enable the construction of Phase One of HS2. The HSR Bill will progress through Parliament during 2014. The Department for Transport (DfT) also published the HS2 Phase One environmental statement and is requesting comments on it. The consultation period closes on 24 January 2014.

    The compensation schemes for Phase One of HS2 - London to West Midlands line - should come into operation by summer 2014. The DfT has consulted twice on its proposals. The second consultation closed on 4 December 2014.

    In July 2013, the DfT launched a consultation on the proposed route of Phase Two of HS2. Phase Two will extend the line to Manchester and Leeds. That consultation closes on 31 January 2014.
  • Specialist planning court - in a consultation in September 2013 the Justice Secretary proposed a new 'planning chamber' to ensure that judicial review decisions relating to major developments are taken only by expert judges using streamlined processes.
  • Further changes to judicial review - the Ministry of Justice's consultation in September also asked for views on whether, and how, to limit who is able to apply for a judicial review - for example only to people who have a direct interest in the case so that the process cannot be exploited for campaigning or publicity purposes, at the expense of others. The consultation ended on 1 November and the government's response paper is due to be published by the end of January.
  • Town and village green application changes - the Growth and Infrastructure Act 2013 amended the Commons Act 2006, in England, by removing the right to apply to register land as a town or village green where a trigger event relating to the development of the land occurs. The right to apply for registration becomes exercisable again if a corresponding terminating event occurs.

    In July 2013, the Government consulted on proposals to amend the trigger and terminating events. The Government's response to the consultation confirms that it intends to take forward all of its proposals but the timescale is not yet known.
  • Planning system in Wales - on 4 December 2013 the Welsh Government published a consultation paper, Positive Planning, setting out proposals to modernise the planning system in Wales. The consultation is accompanied by a Draft Planning (Wales) Bill. The consultation closes on 26 February 2014
  • Streamlining and reform of the Green Deal - the Energy Act 2011 introduced the Green Deal, which is a range of energy efficiency measures for both domestic and non-domestic building occupiers, and private sector landlords. They receive finance from accredited providers for energy efficiency improvements, which will be paid for by energy bill savings.

    The Green Deal was formally launched in January 2013. On 2 December 2013, the Government announced various changes to the Green Deal, aimed at addressing the disappointingly low take up of the scheme.
  • Water Bill 2013-14 - this Bill was introduced into the House of Commons in June 2013 and has a number of implications for the property industry. The Bill has four main parts: the water industry, water resources, environmental regulation and flood insurance. It is expected to continue through Parliament and be enacted in 2014.
  • Flooding and insurance - in the summer of 2013, the Government consulted on how to secure the future of flood insurance, seeking views on its proposals to ensure that domestic property flood insurance continues to be widely available and affordable in areas of flood risk in the United Kingdom.

    Flood Re is the preferred option, and it is hoped that it will be in place by summer 2015. In the meantime, Part 4 of the Water Bill allows the government to introduce secondary legislation (if this is needed) to regulate the provision by insurers of flood cover for householders at high risk of flooding.
  • Sustainable drainage systems (SUDs) - Defra is considering the implementation of the approval regime for SUDs, set out in Schedule 3 to the Flood and Water Management Act 2010. The original target date for implementation was revised to April 2014, but Defra announced recently that it will not be meeting that date and a new timeline has not yet been put forward.
  • Rights of light - from February to May 2013, the Law Commission consulted on four provisional proposals relating to rights to light. The Government has indicated that if the Law Commission's project on rights to light is taken forward, a draft bill may be published in late 2014.
  • Easements and covenants - in 2008 the Law Commission published a consultation containing proposals to modernise and simplify the law relating to easements and covenants. The Commission published its report in June 2011 which included a draft bill. The Law Commission is still awaiting the Government's response to its proposals.