Recent research from Search Acumen indicates that the commercial property sector is on track to miss the UK Government's 2030 Minimum Energy Efficiency Standards (MEES) target, with full compliance projected only by 2040. Around half of all energy consumed in commercial and industrial buildings in England and Wales is in the rented sector, placing the onus on landlords to make energy efficiency and heating improvements.

The Bill aims to modernise the UK's planning system, promoting rapid housing development and infrastructure while balancing environmental sustainability. Members should prepare for a dynamic landscape with new opportunities and responsibilities as these reforms take effect, offering new avenues for growth while necessitating adaptability to regulatory changes and a commitment to sustainable development.

As many towns and cities embark on substantial regeneration projects, there is huge potential in the medium and long term in delivering prolonged growth across many commercial channels and as time progresses, we expect to see a substantial keenness from many investors.

The Act is a cornerstone of commercial property law, offering security of tenure to business tenants while balancing landlords’ rights. However, Propertymark believes it is time to modernise the Act to reflect today’s challenges, including Minimum Energy Efficiency Standards (MEES) and fairer lease agreements.

Although we see key aspects of the economy stabilise, the commercial property sector continues to face challenges, as many business sectors evolve to keep pace with ever-progressing trends and shifts in demand. 

Under Part 2 of the Landlord and Tenant Act 1954, most business tenants in England and Wales have the right to renew their tenancy when the current lease ends, with limited grounds for landlords to refuse. With 55% of UK commercial property rented, the Law Commission is consulting on whether this system remains effective for today’s commercial lease market.

The Northern Ireland Executive’s draft Programme for Government identifies providing access to affordable, sustainable, and quality housing as an immediate priority and acknowledges the pressing need for action. Propertymark supports this aim and has made specific recommendations to accelerate progress.

Propertymark calls for fiscal policy geared towards stimulating supply in the private rented sector, boosting homeownership, and tackling the scourge of empty commercial properties that blight Welsh communities.

Planning has not created a housing emergency — but it can help solve the challenges. The Scottish Government is focused on identifying how its planning system can help to provide solutions with the introduction of a new Housing Planning Hub that will be launched and operational in early 2025.

Regulations come into force on 2 December 2024 which will allow local authorities in England to auction off the leases of persistently empty high street shops. The UK Government states that the scheme will breathe life back into town centres and drive local growth and opportunities. Propertymark welcomes the move, but we would like to see more detail on which areas will benefit the most, how the powers will be funded, and how they will be used in practice by councils.

Although the economic outlook remains mixed, the quarter ended with inflation in line with the Bank of England’s target, a precursor to a long-awaited reduction in the base rate. Our agents are bullish regarding capital values and rent levels in key sectors including the Industrial and Land and Yards sectors where demand continues to outstrip supply.

The UK General Election has returned the Labour Party to power with a parliamentary landslide, ending 14 years of Conservative government. Aiming to channel the spirit of Clement Attlee with a proactive and strategic approach to housing, the party campaigned on a manifesto that promised significant changes to planning rules, strict targets for delivery of new homes, reform of the private rented sector (PRS), long-term schemes to help young people onto the housing ladder, and local powers for councils to take over empty commercial premises.

Although challenges remain, key economic indicators give cause for optimism. GDP is trending upward, and inflation is edging closer to the Bank of England’s target. Member sentiment varies by sector, but there is notable positivity in the Land and Yards and Industrial sectors. Supply and demand imbalances remain, most notably in the Pubs and Restaurants sector, which continues to be impacted by changing trends.

The UK Government has announced that new powers to enable local authorities in England to regenerate high streets and fill empty shops will be in place by summer 2024. Propertymark welcomes the move, but we would like to see more detail on which areas will benefit the most, how the powers will be funded, and how they will be used in practice by councils.

The Scottish Law Commission has opened a consultation on the Tenancy of Shops (Scotland) Act 1949, which deals with commercial lease renewals for retail, food and drink, hair and beauty and wholesale tenants. They are seeking the views of agents, tenants, and landlords on whether there is still a need for the Act, and whether it should be repealed, replaced, or reformed.

It is clear from member sentiment, that economic uncertainty, and interest rates in particular, are continuing to weigh on the commercial property market. Supply and demand imbalances continue in key sectors, suggesting that there will be a challenging start to 2024.