Leasehold is a significant and increasing tenure for new homeowners. The Department for Levelling Up, Housing and Communities estimates that there are around 4.98 million leasehold homes in England, of which 3.5 million are flats and 1.5 million are houses. This equates to 20% of the English housing stock.
Landmark legislation should go further
Propertymark Head of Policy and Campaigns, Timothy Douglas, represented members at the APPG for Leasehold and Commonhold in Westminster on 15 January 2024, ahead of the first sitting if the Public Bill Committee. In addition, we will submit written evidence to the committee calling for key measures to strengthen the Bill.
Propertymark is calling for the following amendments to improve the UK Government’s proposals, give more rights and protections to homeowners, and ensure the legislation is workable and evidence-based.
Download our written evidence in full
Regulation of property agents
Propertymark and other sector organisations have lobbied extensively for the recommendations made in Lord Best's 2019 report for industry licensing and qualifications to be implemented, and so we are very pleased to see the amendment tabled by the Shadow Minister for Levelling Up, Housing, Communities and Local Government. If adopted, the clause would require the Secretary of State to make regulations to implement the proposals of the report within 24 months of the Bill being enacted.
Phase out leasehold on new flats
If the UK Government is serious about doing away with leaseholds, then they must extend the ban to all new flats as well as all new houses.
Extend flood insurance protections
Flood Re is the UK scheme to provide flood insurance coverage to domestic properties deemed at significant risk of flooding. It currently excludes private rented and leasehold properties, leaving tenants and homeowners at an unfair disadvantage.
Make absent freeholders accountable
Property agents report difficulties in getting hold of the freeholder during sales processes or when leaseholders need to get in contact for approval of home alterations or to discuss issues with the lease, which slows down the sales process. A mechanism should be in place to make it simple to identify and contact the freeholder, and those who fail to respond should face legal penalties.
Mandate land ownership for developers
Because the right of first refusal only applies to flats, not houses, developers selling new homes on a leasehold basis are not legally obliged to tell the buyer if they have sold the freehold to an investment company. Developers should only be allowed to build and sell properties on land where they own the freehold.
Standardise new home warranties
All developers should adhere to the Consumer Code for Home Builders, but the UK Government must consider how consistency can be created across warranties and guarantees provided by home builders so all consumers can be guaranteed a fair and transparent process and experience.
Enforce transparency for event fees
Specialist retirement properties, usually flats owned on a long leasehold basis, often require owners to pay a fee when they wish to sell or rent out their homes. The use of these fees can benefit leaseholders by making specialist housing affordable because part of the payment for services is deferred until they come to sell. However, a review by the Law Commission in 2017 highlighted a lack of fairness and transparency and recommended limits on some charges and an obligation to provide clear upfront information to buyers.
It is really positive to see an amendment put forward to get the recommendations in Lord Best’s report on the Regulation of Property Agents on the statute book. The Leasehold and Freehold Reform Bill alongside other proposed housing legislation will bring huge change to the way people buy, sell, rent and live in property.
However, currently there no minimum standards to work in the property sector and there are no statutory rules to ensure those buying, selling and managing property are suitably qualified. This amendment is an opportunity to provide a greater level of protection for consumers and should be widely supported.
