What to expect in 2012: property

Practical Law UK Legal Update 2-514-8608 (Approx. 22 pages)

What to expect in 2012: property

by PLC Property

The year ahead: what to expect in 2012

The government's austerity measures will continue throughout 2012, alongside the announcements in the 2011 Autumn Statement, which aim to stimulate economic growth (see Legal update, 2011 Autumn Statement: property implications). The 2012 Budget will take place on Wednesday 21 March 2012 (see Legal update, 2012 Budget date announced).

Highlights to look out for this year include:

The announcement of changes:
- to the law relating to the registration of town and village greens in England; and
- subject to the outcome of Lord Hodgson's review, to the Charities Act 2006 provisions regulating the disposal of charity land.
Further streamlining of the planning system and improvements to the system of obtaining non-planning consents.
The government’s announcement on the future of flood insurance in spring 2012.
The government's response to the Portas Review in spring 2012.
The final National Planning Policy Framework (NPPF) by April 2012.
The new energy performance certificate (EPC) regulations coming into force on 6 April 2012.
The Localism Act 2011 (LA 2011) provisions coming into force in April 2012, including those relating to neighbourhood planning and planning enforcement.
The new criminal offence of squatting in residential premises, expected to come into force in summer or autumn 2012.
The amended rules relating to the registration of charges created by companies and limited liability partnerships, expected to come into force on 1 October 2012.
Changes to the Single Payment Scheme in late 2012.
The end of the SDLT reliefs for first time buyers and zero carbon homes, and the relaxation of some of the UK Real Estate Investment Trusts (REITs) requirements.

Charity

The Charities Act 2011 will come into force on 13 March 2012. The provisions relating to charity land are set out in sections 117 to 129. However, as a piece of consolidating legislation, the Act does not change the law. For more information, see Legal update, Charities Act 2011 receives Royal Assent: property implications.
Charitable incorporated organisations should become available from early 2012. This is a new legal structure for charities, originally introduced under the Charities Act 2006, but not yet in force (see Practice note, Charitable incorporated organisation (CIO)).
Lord Hodgson of Astley Abbotts aims to complete his review of the Charities Act 2006 before summer 2012, and a report will then be laid before Parliament. The review will consider improvements to the rules regulating the disposal of charity land, to make the law more proportionate to the nature and type of disposals made by charities. For more information, see Legal updates, Charities Act 2006: Lord Hodgson to lead review and report by summer 2012 and Making it easier for charities to sell land: government response to consultation.
The Law Commission published its 11th Programme of Law Reform in July 2011. The programme includes a project that will examine a range of issues concerning the regulation and constitution of charities, including how certain charities hold property and the disposal of charity land. The Law Commission will commence this project in late 2012 and issue a consultation in late 2013. For more information, see Legal update, Law Commission publishes its 11th Programme of Law Reform: property implications.

Common land

The national implementation of Part 1 of the Commons Act 2006 has been delayed following a review of the pilot scheme implemented by seven commons registration authorities (see Legal update, National implementation of Part 1 of the Commons Act 2006 delayed). The Department for Environment, Food and Rural Affairs' (Defra) decision on how and when to go ahead with national commencement is still awaited (see Defra: Commons registration).
In summer 2011, Defra consulted on proposals to reform the complex law relating to the registration of town and village greens in England (see Legal update, Consultation to reform registration of town and village greens published). Defra's consultation response is expected in early 2012.
Natural England is drafting Orders to extend the boundaries of the Lake District and Yorkshire Dales National Parks. The Orders are expected to be available for public inspection during February 2012 (see Natural England: Lakes to Dales Landscape Designation Project (2 December 2011). For the background to Natural England's decision, see Legal update, Consultation on revised boundary extensions to the Lake District and Yorkshire Dale National Parks).
The Welsh Government (WG) is analysing the responses to its consultation on whether to continue with the temporary measures that currently allow rights of common to be severed from the land that benefits from the right (see Legal update, Welsh Government consults on common land rights). The WG's consultation response is expected in spring 2012.

Company law

Defra published a White Paper on the Natural Environment in June 2011. This stated that, by 2012, the government will publish new guidance for businesses on how to measure and report their corporate environmental impacts. For more information, see Legal update, Defra publishes Natural Environment White Paper.

Conservation, habitats and wildlife

In the 2011 Autumn Statement, the government announced that it intended, by the 2012 Budget, to review the Habitats directive (Directive 92/43/EEC) and the Birds directive (Directive 2009/147/EC), as implemented in England (see Legal update, 2011 Autumn Statement: property implications: Planning reform: Compliance with Habitats and Birds directives).
Defra's White Paper on the Natural Environment provided that a new designation will be introduced by April 2012 to allow local communities to protect areas that are important to them for recreation, the view or for an area's importance for wildlife (see Legal update, Defra publishes Natural Environment White Paper).
The Law Commission's 11th Programme of Law Reform includes a project that will look at providing a modernised and simplified statutory wildlife law framework. The Law Commission will also check that the current law is EU law compliant and capable of easy amendment to reflect new requirements. The Law Commission will carry out an information gathering exercise, before issuing a consultation in summer 2012. For more information, see Legal update, Law Commission publishes its 11th Programme of Law Reform: property implications.
During 2012, the government is likely to clarify its forestry and woodland policy in England and the role of the public forest estate, following an independent panel review in 2011 (see Legal update, Government U-turn on sale of the public forest estate).

Conveyancing

Under the Legal Services Act 2007, Alternative Business Structures (ABSs) can open for business from 6 October 2011 (see Practice note, SRA Handbook 2011 and Code of Conduct: New SRA rules to respond to "Tesco Law"). The Council for Licensed Conveyancers was authorised to license ABSs to provide certain reserved legal activities from 6 October 2011 (see Legal update, Council for Licensed Conveyancers authorised to regulate Alternative Business Structures). The Solicitors Regulation Authority (SRA) has also been designated as a licensing authority and will begin accepting licensing applications from 3 January 2012 (see Legal update, SRA to license ABSs by the end of the year).
The Land Registry is considering expanding its information services to include searches of the Local Land Charges Register and other information currently supplied by local authorities. The Land Registry’s Board will consider the business case for this proposal at the end of 2011 and will make an announcement as soon as possible in 2012 (see Land Registry press release, Land Registry considers provision of Local Land Charges services, 6 July 2011).
The Financial Action Task Force (FATF) is currently reviewing its recommendations to address new and emerging money laundering risks, as well as any existing deficiencies and loopholes. The FATF's revised recommendations are due to be adopted in February 2012 (see Practice note, An overview of the UK money laundering regime: International initiatives impacting the UK: FATF recommendations: FATF's review of its recommendations).
In the implementation update for the Plan for Growth, the government confirmed that, by March 2012, it will publish a formal response to the consultation on amending the Money Laundering Regulations 2007 (SI 2007/2157) and set out which proposals are to be taken forward (see Legal update, Progress on implementing the Plan for Growth: Regulation).
During 2012, other lenders may follow Santander's lead, by making membership of the Conveyancing Quality Scheme mandatory for law firms applying to be on their conveyancing panel (see Legal update, First lender makes CQS membership mandatory for panel applicants).
During 2012, the Office of Fair Trading (OFT) is likely to issue final guidance on the application of the Consumer Protection from Unfair Trading Regulations 2008 (SI 2008/1277) and Business Protection from Misleading Marketing Regulations 2008 (SI 2008/1276) to estate agents (and others) in relation to the buying or selling of property or land in the UK (see Legal update, OFT consults on draft guidance for estate agents and property developers).

Development and construction

Enterprise zones

Enterprise zones and benefits will be expanded:

Two new enterprise zones are expected to be in operation in Warton and Brough by April 2012. The existing North East enterprise zone will also be extended, with the approval of a new zone at Battersea being considered.
100% first year capital allowances will apply to expenditure on plant and machinery (between April 2012 and March 2017) by businesses located in six enterprise zones.

For more information, see Legal update, 2011 Autumn Statement: property implications: Enterprise zones: expansion of areas and benefits.

Infrastructure

The National Infrastructure Plan 2011 sets out a pipeline of over 500 infrastructure projects, many of which will commence in 2012. According to the Plan for Growth: Implementation update, every quarter the government will publish a rolling two year forward programme of infrastructure and construction projects where public funding has been agreed. For more information, see Practice note, National Infrastructure Plans: construction, environment and property implications: National Infrastructure Plan 2011.
The Law Commission expects to issue a consultation in autumn 2012 on the electronic communications code, which governs rights for network providers to install and maintain infrastructure on public and private land (see Legal update, Law Commission publishes its 11th Programme of Law Reform: property implications).

Non-planning consents (following the Penfold Review)

Following the Penfold Review of non-planning consents, the government plans to introduce a number of measures in 2012 to improve the system of obtaining consents for development:

It will introduce a 13-week maximum timescale for the majority of non-planning consents, to speed up the consent process and give certainty to developers. Non-planning consents include environmental permits, hazardous substance consents, compulsory purchase orders, listed building and conservation area consents, highways consents and building regulation consents. This measure came into immediate effect for government agencies in November 2011 and will, subject to consultation, be extended to local authority consenting agencies.
It will simplify a number of non-planning consents from early 2012. Some consents will no longer be needed.
It will make it easier to apply for non-planning consents. This will include providing information and links on the Planning Portal, regarding key non-planning development consents closely associated with planning permission, which will go live from April 2012.

More detailed timescales for the various measures proposed by the government are set out in BIS: Implementation of the Penfold Review (November 2011). For background information on the Penfold Review, see Legal update, Penfold Review: final report published.

Red Tape Challenge

In January 2012, housing, planning and construction will feature as themes in the government's Red Tape Challenge. The aim is that unnecessary regulations will be eliminated and remaining controls will be proportionate and cost effective. For more information, see Legal update, Progress on implementing the Plan for Growth.
The government intends to reduce the regulatory burdens on farmers and food processors in accordance with the recommendations of the Farming Regulation Task Force. The government will consult on exempting organic farmers from regulations controlling the use of nitrate-based fertilisers and will also recognise third-party certification schemes (see Legal update, 2011 Autumn Statement: property implications: Farming Regulation Task Force).

Underground development

The Subterranean Development Bill was introduced in the House of Lords in December 2011. Its second reading has not yet been scheduled. The bill makes provision for the regulation of, and a code of practice for, subterranean development work.

Easements, covenants and other third party rights

In August 2011, the Department for Communities and Local Government (DCLG) consulted on the use of restrictive covenants in the pub industry and their impact on local communities (see Legal update, Consultation published on the use of restrictive covenants by pub industry). The DCLG's consultation response is expected at the end of January 2012.
The Law Commission published its final report recommending the changes to be made to the law governing easements, covenants and profits à prendre in June 2011 (see Legal update, Law Commission publishes final report on easements, covenants and profits à prendre). The government's response to the Law Commission's recommendations is awaited.
The Law Commission's 11th Programme of Law Reform includes projects that will:
- look at whether to introduce conservation covenants as a new statutory interest in land. The Law Commission will commence this project in early 2012 and issue a consultation in late 2012; and
- examine the existing law on rights to light, including the law's interrelationship with the planning system and the suitability of the existing remedies. The Law Commission will commence this project in spring 2012 and issue a consultation in spring 2013.
For more information, see Legal update, Law Commission publishes its 11th Programme of Law Reform: property implications.

Energy and buildings

CRC Energy Efficiency Scheme

The first sale of allowances under the CRC Energy Efficiency Scheme for 2011/12 will take place in 2012. The government will consult on draft legislation to amend the scheme between February and April 2012. The government's consultation response and updated Environment Agency guidance is expected in September 2012. For more information, see Legal update, CRC: Government outlines detailed proposals to simplify the scheme and Practice note, CRC Energy Efficiency Scheme: in a nutshell.

Energy Act 2011: the Green Deal and the Renewable Heat Incentive

The Green Deal creates a new "pay as you save" financing mechanism, available from accredited Green Deal providers to allow a range of energy efficiency measures (such as loft insulation or heating controls) to be installed in homes and businesses at no upfront cost. The energy suppliers will then recover the Green Deal payments through the property's energy bills. The first Green Deals are expected in autumn 2012. For more information, see Practice note, The Green Deal: When will the Green Deal start?.
The government is introducing a Renewable Heat Incentive (RHI), under which organisations and individuals that install an eligible renewable heating system or inject biomethane into the gas grid will receive regular payments for a period of 20 years. The RHI is expected to be introduced for domestic energy efficiency measures in October 2012. For more information, see Legal update, Renewable Heat Premium Payment scheme opens on 1 August.

Energy performance certificates

The recast EU Energy Performance of Buildings Directive will repeal and replace the 2002 version from 1 February 2012 (see Practice note, EU Energy Performance of Buildings Directives 2002 and 2010).
The Energy Performance of Buildings (Certificates and Inspections) (England and Wales) (Amendment) Regulations 2011 (SI 2011/2452) come into force on 6 April 2012. The key changes to the existing regulations are:
- an energy performance certificate (EPC) is required on marketing for all properties;
- written property particulars must include a copy of the first page of the EPC. It is no longer possible to include only the asset rating; and
- air conditioning reports must be registered.
For more information, see Legal update, New energy performance certificate regulations published.
The Carbon Emissions Reduction Target (CERT) will come to an end and be replaced by the Energy Company Obligation (ECO) in 2012. The ECO is a new obligation on energy companies to meet specific carbon savings targets, which will require them to invest in energy saving measures in homes, with significant sanctions for failure to meet the targets. For more information, see Practice note, CERT and ECO: Carbon Emissions Reduction Target and Energy Company Obligation.

Feed-in tariffs

Existing feed-in tariffs (FITs) are due to change in April 2012 (see Practice note, Feed-in tariffs: overview).

Enforcement and remedies

The Protection of Freedoms Bill 2010-11 is expected to receive Royal Assent in early 2012. This Bill includes provisions relating to CCTV regulation, powers of entry onto property and wheel-clamping on private land (see Legal update, Protection of Freedoms Bill: property implications).
The Ministry of Justice (MoJ) intends to introduce a new criminal offence of squatting in residential properties, which will be committed where a person does all of the following:
- is in a residential building as a trespasser, having entered it as a trespasser;
- knows or ought to know that he or she is a trespasser; and
- is living in the building or intends to live there for any period.
The new offence is contained in the Legal Aid, Sentencing and Punishment of Offenders Bill, which is expected to come into force in summer or autumn 2012. For more information, see Legal updates, MoJ to criminalise squatting in residential buildings and Amendments made to Legal Aid, Sentencing and Punishment of Offenders Bill 2010-11: magistrates' court fines and criminalising squatting.
Part 3 of the Tribunals Court and Enforcement Act 2007 replaces distress with a new system of commercial rent arrears recovery (CRAR). This may be implemented in 2012 (see Legal update, Implementation of the Tribunal, Courts and Enforcement Act 2007 and Article, Looking ahead to 2012: dispute resolution: Possible changes to enforcement law, including consultation on improving enforcement).

Enfranchisement and Right to Buy

The appeals in Lexgorge Limited v Howard de Walden Estates Limited (see Legal update, When is a building a house "reasonably so called"?) and Day v Hosebay Limited (see Legal update, A building used as short-term tourist accommodation could be enfranchised) are likely to be heard together by the Supreme Court in 2012.

Flooding

In England, the government intends that funding for flood and coastal erosion risk management for new properties completed, or existing buildings converted into housing, after 1 January 2012 will not come from the taxpayer (see Legal update, Flood and Water Management Act 2010: national strategy issued and further provisions in force). However, the provisions on sustainable urban drainage systems (SUDs) and payments for connection to existing drainage systems are not yet in force (sections 32 and 42, Flood and Water Management Act 2010). The government is consulting on implementing the requirements for SUDs until 13 March 2012 (see Defra: Implementation of the Sustainable Drainage Provisions in Schedule 3 to the Flood and Water Management Act (2010)).
Defra's consultation on adoption arrangements and build standards for new foul sewers and lateral drains will close on 31 January 2012 (see Defra: Automatic adoption arrangements for new foul sewers and lateral drains and National Build Standards for gravity foul sewers and lateral drains).
In Wales, the WG will consult on changes to the funding of flood and coastal erosion risk management in 2012 (see Legal update, Welsh Government publishes flood and coastal erosion risk management strategy).
The WG's consultation on adoption arrangements and build standards for new foul sewers and lateral drains will close on 23 January 2012 (see Legal update, Welsh Government consults on adoption arrangements and build standards for new foul sewers and lateral drains).
The WG is also consulting on social tariffs guidance for water and sewerage companies until 6 February 2012 (see Legal update, Welsh Government consults on social tariffs guidance for water and sewerage companies).
In spring 2012, the government intends to decide the way forward for flood insurance after expiry of the Statement of Principles in June 2013 (see Legal update, Government issues holding response on flood risk insurance).
The government is proposing to transfer inland waterways in England and Wales to a new waterways charity and to abolish the Inland Waterways Advisory Council. Subject to approval, the new charity is expected to assume responsibilities in April 2012. For more information, see Legal updates, Consultation on proposals to transfer inland waterways to charity and Supplementary consultation on proposals to transfer inland waterways to charity.
From October 2012, the Environment Agency will assess all reservoirs in England and Wales capable of holding more than 25,000m³ of water above ground level, to determine which should be designated as high risk. The consultation on the method for determining which ones should be designated as high risk will close on 23 February 2012. For more information, see Legal update, Flood and water management: consultation on high risk reservoirs.

High speed rail link (HS2)

The government will announce its decision about whether or not to proceed with the proposed high speed rail link (HS2) from London to Birmingham in January 2012 (see High-speed rail decision postponed until new year, Guardian.co.uk, 6 December 2011 and, for further information, Practice note, Proposed high speed rail link between London and Birmingham).

Housing

The government set out its initiatives to reinvigorate the housing market in Laying the Foundations: A Housing Strategy for England (the strategy), published on 21 November 2011. Key initiatives include:
- introducing a new build indemnity scheme aimed at increasing the supply of affordable mortgage finance for new build homes. Home buyers will be able to buy with a 5% deposit. Housebuilders and the government will contribute to an indemnity fund, which will be used to pay out to a lender where a buyer defaults and there is a shortfall if the property is repossessed. The first loans under the scheme will be available in spring 2012;
- a consultation, to be issued by January 2012, on allowing developers to require local planning authorities (LPAs) to reconsider section 106 agreements completed prior to April 2010, in more prosperous market conditions;
- encouraging new development that enjoys local support. The government will publish a prospectus with further details of its planned competition to promote the development of large scale developments in 2012; and
- introducing legislation in the Finance Bill 2012 to make REITs easier to set up and more accessible to investors. The proposed changes will make REITs more suitable for residential investments and will hopefully encourage large scale residential investment (see Legal update, Draft finance Bill 2012 legislation: key business tax measures: REITs: easing some of the requirements).
For more information, see Legal update, New housing strategy launched. Annex A to the strategy sets out the key dates in the government's action plan.
In August 2011, the DCLG consulted on a new mandatory power of possession for anti-social behaviour (see Legal update, DCLG consults on a new mandatory power of possession for anti-social behaviour). The strategy states that the DCLG's consultation response is expected in January 2012, with a conclusion that powers should be widened.
The WG has recently published a similar consultation, which closes on 10 February 2012 (see Legal update, Welsh Government consults on mandatory power of possession for anti-social behaviour).
For more information on anti-social behaviour and housing, see Practice note, Anti-social behaviour: housing.
The Communities and Local Government Committee is carrying out an inquiry into park homes. Submissions should be made by 1 February 2012 (see Legal update, Communities and Local Government Committee to carry out park homes inquiry).
The WG is consulting on the issues and challenges surrounding meeting housing needs as part of preparing a new Housing Bill to be introduced in Wales in 2012. The consultation will close on 17 February 2012 (see Legal update, WG consults on housing issues in preparation for new Housing Bill).
The Mayor of London is seeking comments on a revised housing strategy for London by 6 March 2012 (see Legal update, Mayor of London publishes a revised housing strategy).

Insurance

The Law Commission and the Scottish Law Commission are consulting on four areas of insurance contract law, including damages for late payment (where an insurance company takes a long time to pay a valid claim) and clarification of the law relating to fraudulent claims. The consultation will close on 20 March 2012 (see Law Commission: Insurance Contract Law: Post Contract Duties and other Issues ).
For a summary of the ongoing review of insurance contract law launched by the Law Commission in January 2006, see Practice note, Reforming insurance contract law.
The Consumer Insurance (Disclosure and Representations) Bill 2010-11 is currently passing through Parliament. The Bill affects consumer insurance contracts and aims to:
- update the law relating to pre-contractual disclosure and misrepresentations; and
- simplify the existing legal framework for consumer contracts.
The Bill may receive Royal Assent towards the end of 2012. However, it may not be brought into force until at least a year later.
For more information on the Bill, see Legal update, Consumer Insurance (Disclosure and Representations) Bill 2010-11 published and PLC Property legislation tracker, Consumer Insurance (Disclosure and Representations) Bill 2010-11.
The Third Parties (Rights against Insurers) Act 2010 received Royal Assent on 25 March 2010. It modernises the mechanism in the Third Parties (Rights Against Insurers) Act 1930 by which creditors can access insurance policies held by insolvent companies. It is not yet in force and will be brought into force by statutory instruments once the government has completed its review of all regulations inherited from the Labour government (see Legislation tracker note: Third Parties (Rights Against Insurers) Act 2010).

Landlord and tenant

The Dilapidations Protocol has been adopted by the Civil Procedure Rules on 1 January 2012. This will enable a tenant to ask for a dilapidations claim to be struck out if the Protocol has not been followed. For more information, see Legal update, Dilapidations Protocol adopted by the CPR and Practice note, Dilapidations: overview.
In summer 2011, the DCLG consulted on increasing the value limits that determine eligibility to rights for long residential leaseholders to:
- remain in their properties at the end of their leases; and
- to extend the leases or purchase the freehold of their leasehold houses on particular terms.
The consultation relates to properties in England only. For more information, see Legal update, Consultation published updating value limits for long residential leases. The DCLG's consultation response is expected in mid-January 2012.
The Supreme Court is due to hear the appeal in Daejan Investments Ltd v Benson and others [2011] EWCA Civ 38 on 4 December 2012. This case concerns whether a landlord was entitled to a dispensation from compliance with the service charge consultation requirements under the Landlord and Tenant Act 1985 (see Legal update, Consequences of failure to comply with service charge consultation requirements (Court of Appeal)).

Land registration

The Land Registry has put electronic conveyancing (e-conveyancing) on hold. It is instead concentrating on offering a system whereby applications for most transactions affecting registered land can be lodged electronically (see Legal update, Land Registry puts e-conveyancing on hold).

Land valuation and surveyor's liabilities

The Supreme Court may hear the appeal in Scullion v Bank of Scotland plc (t/a Colleys) [2011] EWCA Civ 693 (see Legal update, Valuer's duty of care to buy-to-let purchaser). This case concerns whether a valuer was liable to the purchaser of a residential buy-to-let property. The case is due to be listed in April 2012.
The Supreme Court has granted permission to appeal in McHale and another v Cadogan and others [2010] EWCA Civ 1471. The appeal may be heard during 2012. This case concerns the way in which the tenants' interests should be valued for the purposes of collective enfranchisement under the Leasehold Reform, Housing and Urban Development Act 1993 (see Legal update, Valuing the tenants' interests for collective enfranchisement).

Local government

The government is consulting on draft regulations, for England, to enable the Secretary of State to obtain the information needed for land transfer schemes, which allow local authority owned land that is no longer used for maintained schools to be transferred for the use of an Academy or Free School. The consultation will close on 18 January 2012 and the government's response will be published in spring 2012 (see Legal update, DfE consults on draft Academies (Land Transfer Schemes) Regulations 2011). The regulations will not introduce any new powers for the Secretary of State over local authority land, but, by identifying exactly what information the authority must provide to the Secretary of State, the government hopes to reduce the risk of issues being overlooked, and of schemes being open to challenge by either side. For information on land transfer schemes under the Academies Act 2010, see Practice note, Academies Act 2010: property issues: What the Academies Act 2010 says about land and property.
In May 2011, the government appointed Mary Portas to lead an independent review into the future of the high street. The Portas Review recommendations were published in December 2011 (see Legal update, Portas Review recommendations published). The proposals include how existing legislation (relating to, for example, Business Improvement Districts and business rates) and the Code for Leasing Business Premises could be used to help the high street. The government plans to publish a response to the recommendations in spring 2012.

Localism Act 2011

At the time the LA 2011 received Royal Assent, the DCLG indicated that many of the measures are expected to be in place by April 2012. Provisions of the LA 2011 which are relevant to property, and for which more information on commencement is available, include:

Home information packs (HIPs), which will formally be abolished with effect from 15 January 2012. However, this will have little impact in practice because the requirement to provide a HIP has been suspended since 21 May 2010 as a result of the Home Information Pack (Suspension) Order 2010 (SI 2010/1455).
Neighbourhood planning provisions, which are set out in section 116 of, and Schedule 9 to, the LA 2011 amend the Town and Country Planning Act 1990 (TCPA 1990). These provisions allow planning permission for specified development to be granted in a particular neighbourhood area through neighbourhood development orders (NDOs) (see Practice note, Localism Act 2011: neighbourhood development orders). Schedule 9 also includes provisions that allow LPAs to develop neighbourhood development plans, which set out policies in relation to the development and use of land in a particular neighbourhood.
The government estimates that the neighbourhood planning provisions of the LA 2011 will come into effect in April 2012. The order making powers of section 116 came into force on 15 November 2011, to enable detailed, procedural regulations to be made. A consultation on neighbourhood planning regulations is currently under way (see Legal update, Consultation on neighbourhood planning regulations).
According to The Plan for Growth: Implementation update (29 November 2011), 126 projects are underway across the country to test the neighbourhood planning process. The government expects that some of these projects may produce a neighbourhood plan or NDO in 2012.
Amendments to the planning enforcement provisions in the TCPA 1990 which are set out in section 124 of the LA 2011. The amendments will allow LPAs in England to apply to a magistrates' court for a planning enforcement order to enable enforcement action to be taken after the statutory time limit has expired, where the breach was concealed. The government estimates that these changes to the planning enforcement rules will come into effect in April 2012. For more information, see Practice note, Localism Act 2011: enforcement of concealed breaches of planning control.
The abolition of the Infrastructure Planning Commission (IPC), which is dealt with by section 128 of the LA 2011. The government plans to issue a direction in advance of the abolition of the IPC to clarify the transitional arrangements affecting major infrastructure projects (see Practice note, Localism Act 2011: Abolition of the IPC). By July 2012 decisions over major infrastructure projects will be made by Ministers.

For further information on the LA 2011, including information on commencement, see:

London Olympics

The London 2012 Olympic Games (the Olympics) will be held between 27 July and 12 August 2012. For information on the PLC content that may be useful in the context of the Olympics, including links to PLC Property's short term leases, see London 2012 Olympic Games toolkit.

Marine and coastal

In 2012, the government will designate the new marine conservation zones (MCZs) under Part 5 of the Marine and Coastal Access Act 2009 (see Legal update, New marine conservation zones recommendations and Practice note, Marine and Coastal Access Act 2009: Part 5: Marine nature conservation).
In February 2011, the WG consulted on marine planning in Wales (see Legal update, Consultation on marine planning in Wales). The WG's consultation response is expected in February 2012.

Mortgages and security

The Council of Mortgage Lenders (CML) is likely, in early 2012, to issue the final version of a set of standard instructions for a conveyancer who represents the lender, but not the borrower, in a residential conveyancing transaction (see Legal update, CML developing new instructions for "separate representation").
In October 2011, the Financial Stability Board (FSB) consulted on a set of proposed principles for sound residential mortgage underwriting practices (see Legal update, FSB consults on principles for sound residential mortgage underwriting practices). The FSB intends to publish a final set of principles in early 2012.
The FSA is consulting on its entire package of mortgage market review proposals. The consultation proposals include how lenders should assess affordability. The consultation will close on 30 March 2012. The FSA proposes to publish a feedback statement and final rules in summer 2012. However, it does not plan to implement the proposals before summer 2013 (see Legal update, FSA consults on mortgage market review).
Regulations to amend Part 25 of the Companies Act 2006 are expected to come into force on 1 October 2012. The amendments will revise the registration regime for security created by companies and limited liability partnerships. For more information on the proposed changes, see Practice note, Registration of charges created by companies and limited liability partnerships on or after 1 October 2009: Are there any proposals to change the regime for registering charges created by companies and LLPs?.
The government had intended to transfer the regulation of new and existing second charge residential mortgages from the OFT to the proposed Consumer Protection and Markets Authority (CPMA) with effect from 1 December 2012 (see Legal update, HM Treasury announces extension of FSA mortgage and sale and rent back regulation). However, the transfer has been postponed (see Legal update, Government postpones transfer of second charge mortgage regulation from OFT to FCA).
The European Parliament and EU members are considering the European Commission's legislative proposal for a directive on credit agreements relating to residential property (see Legal update, European Commission legislative proposal to regulate residential mortgages). It is not yet clear when this directive might be finalised or when it should take effect in member states.
Permission to appeal has been granted in Various Mortgagors v Various Mortgagees and others (Re North East Property Buyers litigation) [2010] EWHC 2991 (Ch). The appeal may be heard during 2012. The High Court held that the rights of mortgagees had priority over the occupiers' interests under a sale and leaseback scheme (see Legal update, Priority between lenders and occupiers under sale and rent back scheme ).

Nuisance and noise control

The Court of Appeal is due to hear the appeal in Barr and others v Biffa Waste Services Ltd (No 3) [2011] EWHC 1003 (TCC) in late January 2012. This case considers the relationship between the landfill statutory regime and the common law of nuisance (see Article, High Court clarifies relationship between environmental regulatory compliance and private nuisance).
In spring 2010, the Law Commission consulted on reforming the common law offences of public nuisance and outraging public decency (see Legal update, Law Commission consultation on reforming public nuisance). The Law Commission's report is expected in summer 2012.

Planning

Progress on the review of the Welsh planning system

The WG's legislative priorities during its five year term (2011-16) include a Planning Bill to consolidate existing legislation and make the planning system in Wales more transparent and accessible. An independent advisory group, which issued a call for evidence on 11 November 2011, is expected to issue its recommendations in summer 2012. These recommendations will form part of the evidence base for the WG's proposed Planning Bill, which it plans to bring forward in 2013. For more information, see Legal update, Welsh Government consults on planning system delivery.
The WG's consultation on planning for supporting the economy will close on 5 March 2012 (see Legal update, Welsh Government consults on planning for supporting the economy).
Other likely developments during 2012 which relate to the planing system in Wales include:
- improvements to the planning appeals process, which are similar to the changes introduced in England in 2009 (see Legal update, Welsh Government consults on planning appeals process); and
- proposals to monitor how the planning system contributes to sustainable development in Wales (see Legal update, Welsh Government consults on framework for measuring the planning system's contribution to sustainability).

National Planning Policy Framework

The NPPF is expected to be finalised by April 2012. The NPPF will replace the current suite of national Planning Policy Statements, Planning Policy Guidance notes and some planning circulars, with a single document which will set out the planning policies applicable to England.

A presumption in favour of sustainable development is central to the policy approach in the draft NPPF and this has proved particularly controversial. On 21 December 2011, the Communities and Local Government select committee published its report on the draft NPPF in which it warned that the definition of sustainable development needs to be expanded and strengthened (see Communities and Local Government Committee Report: The National Planning Policy Framework (December 2011)).

For more information, see Legal updates:

Other planning provisions

In November 2011, the government announced that it plans to consult on proposals to allow developers to challenge section 106 agreements which were signed before April 2010, when the housing market was more buoyant (see Housing).
In early 2012, the government will publish its response to the consultation on proposals to make it easier to convert commercial premises to residential (see Legal update, Consultation on relaxing rules on changing commercial premises to residential use).
It also plans to consult shortly on additional proposals to improve the efficiency of the Town and Country Planning (Use Classes) Order 1987 (SI 1987/764).
In the 2011 Autumn Statement, the government announced that it plans to consult on proposals to allow existing agricultural buildings to be used for other purposes such as offices, leisure and retail space (see Legal update, 2011 Autumn Statement: property implications: Consultation to allow agricultural buildings to be used for other purposes).
The government plans to consult shortly on a package of new measures to streamline the planning system, in addition to its proposals for the related consents regimes (see Non-planning consents (following the Penfold Review)). The measures include a 12 month guarantee for the processing of all planning applications, including any appeals. For information on how the government envisages the planning guarantee could operate, see DCLG: The Planning Guarantee and information requirements.
The government hopes to encourage statutory consultees to respond more promptly to planning applications by:
- introducing measures, in summer 2012, to provide a more effective mechanism for applicants to obtain an award of costs, if there is an appeal against refusal of a planning permission where a statutory consultee has acted unreasonably; and
- asking key statutory bodies to bring forward improvement plans by spring 2012.
In addition, the government plans to consult on measures to strengthen existing time-limits for providing responses on planning applications.
The timetable for the preparation and designation of National Policy Statements (NPSs) has been updated (see Planning Act 2008: National Policy Statements: Timetable for the preparation and designation of NPSs). The waste water NPS will be completed by January 2012. The hazardous waste NPS is due to be published by summer 2012.

For details of other forthcoming planning proposals, but for which no timescale has been announced, see Legal update, 2011 Autumn Statement: property implications: Planning reform.

Rural and agricultural land

The current system of Common Agricultural Policy (CAP) ends on 31 December 2013. In June 2011, the European Commission announced its budget proposals for the period from 2014 to 2020, including the funding for the CAP (see European Commission: A Budget for Europe 2020 (COM(2011) 500/final) Part I and Part II). In October 2011, the Commission outlined its legislative proposals for reform. The main elements of the proposals include:
- ending the current Single Payment Scheme and replacing it with a similar group of schemes;
- allocating new entitlements based on the land area declared by a farmer in 2014, but only to those farmers who have made a claim in 2011;
- introducing a Basic Payment Scheme plus an additional amount which will be subject to "greening" conditions such as crop diversification, permanent pasture retention and ecological focus area allocation;
- making the "greening" element of the payment (which will account for 30% of the payment) compulsory for all member states;
- capping the payments by the application of thresholds (claims of more than EUR150,000 and up to EUR200,000 will be cut by 20%; more than EUR200,000 and up to EUR250,000 by 40%; more than EUR250,000 and up to EUR300,000 by 70%; and nothing will be paid above EUR300,000);
- replacing three of the current four Rural Development Axes with "priority areas";
- easing of some of the Cross Compliance requirements;
- restricting some types of transfers of entitlements on the sale or lease of a holding; and
- introducing schemes to help young farmers and "areas with natural constraints".
For further information see European Commission: Agriculture and Rural Development. There are likely to be further amendments and the final form of the reform is not expected until late 2012. PLC Property will publish a practice note outlining the changes to the Single Payment Scheme when they are announced.

Statutory liabilities and utilities

The Environmental Permitting (England and Wales) Regulations 2010 (SI 2010/675) provide for the registration of domestic septic tanks. In the case of a (small) septic tank in England and Wales which discharges 2 cubic metres per day or less sewage to groundwater, the deadline for registering the septic tank with the Environment Agency was 1 January 2012. The government is currently reviewing this requirement and, in the meantime, the Environment Agency has stated that registration is not compulsory in England only. The regulatory position in England will be reviewed by 31 December 2012.
The WG has confirmed that septic tanks and small sewage treatment plant discharges in Wales must still be registered with the Environment Agency by 1 January 2012.
For more information, see Ask the team: What are the registration requirements for small domestic septic tanks?.
The government has set aside an extra £675 million for local authorities in England who freeze or reduce their council tax in 2012-13. The devolved administrations will receive additional funding. The government will also fund South West Water to enable it to cut bills by £50 per year for all household customers (see Legal update, 2011 Autumn Statement: property implications: Supporting households).
The DCLG is expected to consult on further changes to the Building Regulations during 2012. For more information on this, the forthcoming Building Regulations consultation in Wales and the Building Regulations (Review) Bill, see Legal update, What to expect in 2012: construction: Building Regulations 2010 (BR 2010).
In November 2011, the government accepted the recommendations of Professor Löfstedt's review of health and safety regulation. The government intends to take various measures by summer 2012, including simplifying health and safety guidance for small businesses and ensuring that guidance (from the HSE, professional bodies and insurers) is simple and consistent. For more information, see Legal update, 2011 Autumn Statement: property implications: Health and safety: review of regulations.
HSE industry guidance requires that inspection hatches are fitted before 31 December 2012 to existing gas central heating systems where the flue system is concealed within a void and cannot be visually inspected (see HSE: Gas boilers - flues in voids (2 December 2010)).

Tax

Business rates

In the 2011 Autumn Statement, the government announced that:
- it will extend the current small business rate relief holiday for a further six months from 1 October 2012; and
- all businesses in England will be given the ability to defer 60% of the Retail Prices Index based increase in their 2012-13 business rate bills. The deferred amount is to be repaid equally over the following two years.
(See Legal update, 2011 Autumn Statement: property implications.)
The Local Government Finance Bill 2011-12 has been published, which introduces a rates retention scheme, to enable local authorities to retain a proportion of the business rates generated in their area (see Legal update, Local Government Finance Bill 2011-12 published).

Capital allowances

The government has published draft legislation to change the rules on claims for capital allowances on fixtures that are acquired as part of a property purchase or tenancy with effect from 1 April 2012 (for companies) and 6 April 2012 (for unincorporated businesses). The new provisions require the buyer and seller to agree (if possible) on the value apportioned to fixtures (which must not exceed the original cost). Generally, this will take the form of an election under section 198 of the Capital Allowances Act 2001. The seller must pool the assets before the sale and the value apportioned to the fixtures must be agreed in writing within two years of the transaction. If the parties cannot agree on the value, either party may apply to the First-tier Tribunal (tribunal) within the two-year period for a ruling. Comments on the draft legislation are invited by 10 February 2012. For more information, see Legal update, Capital allowances on fixtures: draft legislation and responses to consultation).
The government intends to introduce legislation in the Finance Bill 2012 to:
- withdraw enhanced capital allowances for expenditure on plant and machinery that could attract FITs or RHI tariff payments; and
- modify the proposal that expenditure on plant and machinery that attracts FITs or RHI tariffs should be designated as special rate.
For more information, see Legal updates, Government responds to consultation on capital allowance treatment of FITs and RHI plant and Draft finance Bill 2012 legislation: key business tax measures: Capital allowances: Feed-in Tariffs and the Renewable Heat Incentive.

Stamp duty land tax

The SDLT relief for:

First time buyers is due to end on 24 March 2012 (see Legal update, 2011 Autumn Statement: business tax implications: SDLT first time buyer relief).
Acquisitions of "zero carbon homes" is due to end on 30 September 2012 (see Practice note, SDLT reliefs for residential property: The reliefs).

VAT

Member states must implement the new Directive on the simplification of VAT invoicing by 31 December 2012 (see Practice note, Value added tax: Future developments).

What to expect in 2012: property | Practical Law