Propertymark has welcomed a commitment from the Minister of State for Housing and Planning, Matthew Pennycook, to reform the leasehold system in England and Wales and to regulate the property sector by revisiting Lord Best’s Regulation of Property Agents report from 2019.
On 21 November 2024, Pennycook made a statement on the UK Government’s upcoming steps regarding leasehold and commonhold reform.
The statement laid out the steps the UK Government wishes to take to enact the reforms to the leasehold system, alongside a wider set of reforms to the leasehold and commonhold system throughout the remainder of this parliament while collaborating with delivery partners and stakeholders.
Although the UK Government stressed that there are some fundamental flaws in the Leasehold and Freehold Reform Act 2024 that must be corrected prior to some of the measures taking effect, the statement reaffirms the UK Government’s pledge to enact the Leasehold and Freehold Reform Act 2024.
The statement explains that in January 2025, the UK Government will start removing the two-year restriction on enfranchisement and lease extension claims from the point of property purchase so that leaseholders will no longer have to wait.
In Spring 2025, the UK Government will start the provisions on the Right to Manage which increases access to the right for leaseholders in mixed-use buildings, alongside reforming costs and voting rights.
Next summer, the UK Government will consult on the valuation rates used to work out the cost of enfranchisement premiums.
The UK Government will consult on implementing the Leasehold and Freehold Reform Act’s new consumer protection provisions for homeowners on freehold estates.
On the separate issue of the Leasehold and Commonhold Reform Bill, a draft bill will be published in the second half of next year, which will aim to tackle unregulated and unaffordable ground rents.
This includes removing the threat of forfeiture to guarantee compliance with a lease agreement, and to begin preparing the transition away from leasehold by publishing a White Paper on reforms to commonhold early next year.
The UK Government has also committed to revisiting Lord Best’s 2019 report on regulating the property sector, which includes minimum compulsory qualifications, as well as consulting next year on choices to reduce the prevalence of private estate management arrangements to stop ‘fleece holding’.
The Ministry of Housing, Communities and Local Government published a report on 18 July 2019 outlining the Regulation of Property Agents Working Group’s suggestions for industry licencing, a regulatory framework and qualifications. Propertymark was part the working group consisting of industry stakeholders led by Lord Best, and it is something the professional body has consistently campaigned for ever since.
Propertymark’s own report on leaseholding titled Leasehold and Freehold Reform: what has changed?, which was updated in September 2024, found that 72 per cent of members queried stated that homebuyers are now more aware of the issues surrounding leaseholds than they were five years ago.
Furthermore, 60 per cent of respondents said that buyers generally ask for information about the lease before they view a property.
Respondents were also in favour of many solutions to reform the leasehold system such as extending requirements to restrict ground rents, but 42 per cent of respondents were equally for and against abolishing the leasehold system.
One solution proposed by the paper was moving towards a commonhold system, with the appointment of a block manager being a simple solution to tackle issues like dispute resolution and chasing contributions from other commonholders.
Timothy Douglas, Head of Policy and Campaigns at Propertymark, comments:
“Propertymark welcomes further reforms to leasehold to strengthen protections for consumers and make it easier for people to buy, sell and rent homes.
“It is encouraging that the Minister is looking again at Lord Best’s report and understands the value of qualifications for agents and professionalising the property sector. Propertymark looks forward to continuing to work with the UK Government to ensure these requirements are extended as widely as possible across the property sector.”
Propertymark has a fact sheet on the Leasehold and Freehold Reform Act which can be accessed by becoming a member. Click here to find out more: Fact sheet: Leasehold and Freehold Reform Act 2024 | Propertymark.
