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Government urged to bring in ‘already-announced’ leasehold reform measures

  • 27/01/2022
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Government urged to bring in ‘already-announced’ leasehold reform measures
Multiple organisations have signed an open letter to Michael Gove, Secretary of State for Levelling Up, Housing and Communities, urging him to implement “already-announced” leasehold reform measures as soon as possible.


In the letter, the companies said that they were pleased to be working with and supporting the government’s leasehold reform plans, and it had worked with the government to develop policies that would lead to “real-world improvements”.

However, the letter said that it was “disappointed” that the government had not implemented these measures and called on the government to include “already-announced measures in future legislative plans as soon as possible”.

The letter continued: “The research undertaken by, and on behalf of, the government has delivered generally non-contentious recommendations many of which the government has publicly supported.

“However, without the legislation to deliver the improvements, consumers continue to be impacted by the exploitation of their homes by third parties.”

Earlier this week the leasehold reform bill passed its third reading in the House of Commons, bringing it one step closer to becoming law, but key amendments around the removal of ground rents for existing properties were defeated.

Organisations that have signed the letter include: the Conveyancing Association (CA), The Society of Licensed Conveyancers, the Property Redress Scheme, Intermediary Mortgage Lenders Association, Residential Property Surveyors Association, Propertymark, Hunters, Property Information Products, Love Surveying, The Guild of Property Professionals and ULS Technology.

Beth Rudolf, director of delivery at CA, said that the government had “already done its listening” when it came to leasehold reform and had outlined and supported a range of measures that would “make a world of difference” and had industry support.

She said: “In that sense, we are simply calling on the government to fulfil its obligations in this area. By doing this we can ensure leaseholders can set in motion parts of the property-owning democracy that are simply not open to many of them, such as selling their properties or securing a mortgage.

“Plus, we can move towards a much fairer system for all – the hard work has effectively been done and it is now time to move these measures through to their natural legislative conclusion where they will make a huge difference.”

Angela Hesketh, director of conveyancing transformation at ULS Technology, said: “The need for reform is well overdue and has left consumers exposed to unfair practices and unnecessary cost and stress within the home owning and home moving process. It is time for the government to legislate to support the absolute need for change to protect current and future homeowners.”


Open letter measures

Key leasehold reform measures the letter aims to drive onward include the removal of the ability to convert an Assured Shorthold Tenancy for ground rent of over £250 per year, or £1,000 inside London on long leases.

It also called for the implementation of reasonable fees and timescales for administrative activities, freehold owners to have the same rights as leasehold owners and the removal of estate rent charge owners’ rights to create a long lease where rent charges are unpaid.

It continued that it wanted recommendations from the Law Commission’s 2020 report to be executed, which suggested reform on leasehold enfranchisement, right to manage and commonhold.

Leasehold enfranchisement concerns the statutory right of leasehold to obtain a leasehold extension or buy their freehold.

The report suggested giving owners of flats and houses a “uniform right” to enfranchisement wherever possible, the right to extend leases for 990 years at peppercorn rent, allowing leaseholders to enfranchise immediately after buying their lease, permitting flat owners to buy the freehold when 50 per cent is commercial space as opposed to 25 per cent currently and to simplify the legal and other costs of securing a freehold or extended lease.

Right to manage allows leaseholders to take over management of the building without buying a freehold.

Recommendations include relaxing qualifying criteria, removing requirements that leaseholders pay the landlord’s costs of a right to manage claim, reducing the number of notices that leaseholders must serve, allowing leaseholders to acquire the right to manage over multiple buildings and a right to request information about a property earlier in the process.

Commonhold, which was introduced in 2002, provides freehold ownership of flats and other interdependent properties without the shortcomings of leaseholds.

Measures suggested in the report include removing the unanimous agreement requirement to move to commonhold, increased flexibility, allowing shared ownership leases to be included within commonholds, improving day-to-day operations of commonholds, give homeowners a greater say in setting commonholds’ costs and powers and provide “greater certainty” to mortgage lenders that their interests will be protected.

It also wanted recommendations of the Regulation of Property Agents report from 2019 to be brought in, which suggested a new independent regulator to lead a “new non-departmental public body to oversee a regulatory regime for property agents”.


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