House of Commons Briefing Paper published on regulation of estate agents
The Briefing Paper outlines the steps taken by The Regulation of Property Agents Working Group and Government consultations on the regulation of estate agents. A code of practice is being developed for property agents in all aspects of residential property.
02 August 2021
House of Commons Briefing Paper published on leasehold and commonhold reform
The Briefing Paper summarises the proposed reforms to increase take up of commonhold, change the procedure to obtain a lease extension and enfranchise and to reduce ground rents in new leases to zero.
19 July 2021
Closure of Consultation on Personal Emergency Evacuation Plans in High Rise Residential Buildings
The Government announces the launch of the Commonhold Council which is an advisory panel of leasehold groups and industry experts drawn together to inform the Government on the Commohold model of home ownership.
12 May 2021
The Leasehold Reform (Ground Rent) Bill is published
This Bill limits ground rent in new residential long leases to a peppercorn. The Bill will now make its way through Parliament.
The Debt Respite Scheme (Breathing Space Moratorium and Mental Health Crisis Moratorium) (England and Wales) Regulations 2020 come into force
These Regulations enable individuals to apply for a standard breathing space moratorium or a mental health crisis moratorium. If a moratorium is put in place, this is likely to impact upon action which may be taken by landlords to recover arrears from that individual tenant.
The Housing (Shared Ownership Leases) (Exclusion from Leasehold Reform Act 1967 and Rent Act 1977) (England) Regulations 2021
These Regulations come into force on 1 April 2021 and reflect the changes to the Government’s new shared ownership model which enables purchasers to buy an initial 10% share of a property. The Regulations relate to exemptions to the right to buy the freehold of a house and to Rent Act protection where there is a shared ownership lease where the purchaser owns a share of at least 10%.
16 February 2021
New Chief Inspector of Buildings Announced
The Health and Safety Executive announces Peter Baker as the new Chief Inspector of Buildings who will oversee the establishment of the Building Safety Regulator.
Government announces additional funding for building safety
The Government announces an additional £3.5 billion in funding to pay for the removal and replacement of certain cladding in high-rise residential buildings of 18 metres of above. In addition, a loan scheme is to be established for leaseholders in blocks of between 11 and 18 metres where cladding remediation works are required.
Applications open for £30 million Waking Watch Relief Fund
The Government announced that the £30 million Waking Watch Relief Fund opened for applications (except in relation to Greater London which will be administered by the Greater London Authority (on a date to be announced) but not later than 22 March 2021). The fund is intended to pay the costs of installing a common fire alarm system in eligible residential buildings in England on or after 17 December 2020.
19 January 2021
Government responds to consultation on the Future Homes Standard
The Government has announced that all homes and businesses will have to meet more rigorous new energy efficiency standards to lower consumption and bills.
Government provides initial response to Law Commission’s proposals on commonhold and enfranchisement
The Government announces that it will establish a Commonhold Council made up of leasehold stakeholders and intends to create a new right for leaseholders to extend a lease of a flat or a house by 990 years.
Government announces Waking Watch Relief Fund and extension to Building Safety Fund
The Government announces a £30 million Waking Watch Relief Fund for the installation of fire alarm systems in private sector high-rise buildings with unsafe cladding after 17 December 2020. In addition, the deadline to apply for the £1 billion Building Safety Fund for the removal and replacement of unsafe non-aluminium composite material cladding systems is extended from 31 December 2021 to 30 June 2021.
18 November 2020
Consultation on improvements to energy performance in homes
The Department for Business, Energy and Industrial Strategy launches a consultation: Improving home energy performance through lenders seeking views on the principles of how best to improve the energy performance of domestic properties with a mortgage through obligations on lenders. These include a potential requirement for all lenders to publicly disclose information on the energy performance of their portfolios.
15 October 2020
House of Commons Library Publishes Briefing Paper on Estate Charges
A House of Commons Briefing Paper: “Freehold houses; estate charges” is published. The paper provides background on the issues surrounding freehold estate charges and sets out the Government’s proposals for reform in England, which include a proposal to give rights to freeholders of private estates similar to the rights of leaseholders to challenge the reasonableness of service charges.
Draft Code of Practice for Regulation of Property Agents
Closure of consultation on the draft code of practice.
06 August 2020
Government publishes response to First Homes Consultation
The MHCLG recommends the introduction of a scheme which offers properties for sale with a 30% discount from the market value to people living locally who are first time buyers or key workers. The Government's response proposes:
to give Local Planning Authorities powers to require a higher minimum discount of 40% to 50% provided there is evidence of a need for and viability of homes at a higher discount;
price caps after the discount has been applied of £250,000 in England and £420,000 in London, subject to Local Planning Authority powers to set a lower price cap in certain circumstances; and
eligibility criteria including income caps for applicants and restrictions on re-sale of properties within the scheme.
21 July 2020
Law Commission publishes reports on Enfranchisement, Right to Manage and Commonhold
The Law Commission publishes its reports on Enfranchisement, Right to Manage and Commonhold proposing some fundamental changes to the residential leasehold sector including recommending commonhold to replace leasehold and overhauling the Enfranchisement and Right to Manage processes.
Draft Code of Practice for Regulation of Property Agents is published
A draft overarching Code of Practice for the regulation of property agents is published upon which The Royal Institute of Chartered Surveyors and The Property Ombudsmen are consulting. The Regulation of Property Agents (RoPA) Steering Group will review responses after closure of the consultation on 4 September 2020.
Government publishes estimates of the number of leasehold dwellings in England
The MHCLG has published a report estimating the number of leasehold dwellings in England in 2018/2019. The report estimates that there were 4.5 million leasehold dwellings in England representing about 19% of housing stock in England.
a new national building safety regulator within the Health and Safety Executive will be established;
each building will have an accountable person (usually the owner or landlord receiving service charges) responsible for understanding and managing fire and structural risks and a building safety manager to perform those functions on a day to day basis;
new rights for residents to obtain safety information and new rules requiring residents to co-operate with the building safety manager;
for each building to have a golden thread of building information related to fire and structural safety to be held digitally; and
existing residential buildings above 18 metres will be subject to the new regime once they are occupied and there will be a transitional period for compliance, further details of which will be provided by the Government during 2020.
Funding for replacement of non-ACM cladding on high-rise residential buildings
The Government announces a £1 billion fund in 2020 to 2021 for the removal and replacement of unsafe non-aluminium composite material cladding systems (including high-pressure laminate, wood and other class C/D cladding) from high-rise residential buildings in both the private and social housing sectors.
03 March 2020
Housing Ombudsman and revised scheme
The Housing Ombudsman publishes a revised Scheme giving stronger powers in relation to housing redress. The Scheme will take effect from 1 July 2020 and will include:
a new power that allows the Ombudsman to issue complaint handling failure orders where complaints are not properly dealt with by landlords;
the ability to make a severe maladministration finding and a requirement for a landlord to demonstrate learning after a decision of the Ombudsman; and
developing a new complaint handling code.
28 February 2020
Competition and Markets Authority: update report
The Competition and Markets Authority (“the CMA”) publishes an updated report on their investigation into whether there have been breaches of consumer protection law in the residential leasehold housing sector and the next steps, including future enforcement action by the CMA and the areas where the CMA considers that the law needs to change in the future.
The CMA raises concerns in relation to:
lease terms under which ground rents may initially be high and increase significantly over time doubling more frequently than every 20 years. The CMA estimates that there are around 13,000 leases with ground rents doubling more than every 20 years;
high or escalating ground rents which could result in the lease becoming an assured tenancy under the Housing Act 1988 which may diminish security of tenure. The CMA estimates that there are around 57,000 homes where levels of ground rent exceed the threshold for an assured tenancy;
increases in ground rent linked to the Retail Price Index;
complaints about the mis-selling of leasehold houses;
complaints about high permission fees and service charges. The CMA intend to publish information to assist homeowners to understand their rights and responsibilities;
checks and balances. The CMA intends to work with the Government to introduce a clear statement when a property is advertised for sale of whether it is freehold or leasehold (including the remaining term of the lease) and an estimate of the annual costs of owning that property;
The CMA announces it will be taking enforcement action in relation to certain instances of mis-selling of leasehold property and to address high and escalating ground rents. Its investigation continues.
24 February 2020
New Homes Ombudsman and Consultation response
The MHCLG publishes its response to the consultation: Redress for Purchasers of New Build Homes and the New Homes Ombudsman. It announces that the Government intends to introduce new legislation obliging developers of new build homes to belong to the New Homes Ombudsman and to implement a code of practice for developers building and selling new build homes.
11 February 2020
Leasehold high-rise flats: who pays for the safety work?
The MHCLG launches a consultation: First Homes. The consultation proposes the introduction of a scheme which offers properties for sale with a 30% discount from market value to people living locally who are first time buyers or key workers.
09 January 2020
Law Commission report on Enfranchisement valuation
The Law Commission publishes its report on options to reduce the price payable on enfranchisement. The report proposes three alternative schemes of valuation and a menu of sub-proposals which can be added to any of the three valuation schemes for the Government to consider. It concludes that whichever final valuation method is selected must sufficiently compensate a landlord for interference with its property rights.
New Building Safety Bill and Fire Safety Bill announced
In the background briefing to the Queen’s Speech, the Building Safety Bill and Fire Safety Bill are announced to put in place new regulatory regimes for building safety and extend the Fire Safety Order to building owners and managers of multi-occupied residential premises of any height. The Bills are not published in draft form.
19 December 2019
New voluntary valuation process for high-rise residential buildings
The Royal Institute of Chartered Surveyors, the Building Societies Association and UK Finance agree a new industry-wide voluntary valuation process in relation to buildings above 18 metres. The External Wall Fire Review Process requires a fire safety assessment to be carried out by a suitably qualified person and is valid for five years.
The Phase 1 report makes a finding at paragraph 2.16 that it was not the original intention “to include in Phase 1 of the Inquiry and investigation into the extent to which the building complied with the requirements of the Building Regulations. However…..there was compelling evidence that the external walls of the building failed to comply with Requirement B4(1) of Schedule 1 to the Building Regulations 2010, in that they did not adequately resist the spread of fire having regard to the height, use and position of the building.”
A number of recommendations are made in the report to introduce new legislation to require owners and managers of high-rise residential buildings to provide specific information and documentation to local fire and rescue services and to inspect fire doors to ensure they comply with applicable legislative standards. In addition, owners/managers of all residential buildings (not limited to high-rise buildings) to provide fire safety instructions for all occupants in the building.
07 October 2019
Electric vehicle charging in residential and non-residential buildings
The main proposals are the introduction of a new national simplified model for shared ownership, permitting increases of shares by 1% or more (currently the minimum incremental increase is 10%) and the removal of pre-emption clauses allowing landlords an exclusive right to market the property for eight weeks.
The MHCLG publishes a consultation: Building a safer future: proposals for reform of the building safety regulatory system. The proposals include a new regime for residential buildings over 18 metres and the introduction of the concept of a “golden thread” of information on the structure of the building and changes made to it to be held digitally and updated throughout the life cycle of the building. In addition, new concepts of “dutyholders” and “accountable persons” to have clear responsibilities (to be defined in legislation following the consultation).
The MCHLG announces 40 developers, agents and landlords have signed up to an industry pledge agreeing not to include a clause in any new lease for ground rent to double more frequently than every 20 years and to identify and amend any existing leases within their portfolios where those clauses are present and include a link ground rent increase to RPI.
19 March 2019
New report published on Leasehold Reform
The Housing, Communities and Local Government Select Committee publishes its report following its inquiry into leasehold reform.
The headline recommendations made by the Committee include:
a proposal for commonhold to become the main ownership model for flats in England and Wales;
for the Competition and Markets Authority to investigate mis-selling in the leasehold sector;
to introduce a standardised key features document as part of a sales process identifying the tenure, the length of lease, ground rent etc;
to ban financial incentives for buyers to use a Solicitor selected by a developer;
to introduce legislation to remove onerous ground rents in existing leases and for ground rents in new leases to be a peppercorn;
to restrict perceived onerous permission fees in existing leases;
to introduce a standardised service charge demand;
to introduce a new consultation process for leaseholders for major works in privately-owned buildings with a cap of £10,000 per leaseholder;
to prevent freeholders from recovering legal costs through service charge or any other means where a leaseholder has been successful in legal proceedings against a freeholder.
The Law Commission’s intention is to simplify the right to manage (“RTM”) process and to give power to the First-Tier Tribunal (Property Chamber) to waive procedural mistakes so that less claims to acquire the RTM fail.
In addition, it proposes to relax the current qualifying criteria so that buildings with more than 25% non-residential parts could qualify for the RTM and to establish clearer rules for the transfer of information between the landlord and the RTM Company in relation to management matters.
It also proposes to permit an RTM Company to acquire the RTM over multiple buildings on an estate rather than, as is currently necessary, requiring a single RTM Company to acquire the RTM over a single building on an estate.
establishing a Housing Complaints Resolution Service as a single point of access for tenants, leaseholders of residential premises, purchasers of new build homes and users of residential property agents;
establishing a Redress Reform Working Group to develop proposals;
creating a New Homes Ombudsman for buyers of new build homes; and
requiring all private landlords to become members of a redress scheme.
The Commonhold and Leasehold Reform Act 2002 introduced Commonhold as an alternative structure to leasehold. It allows for the ownership of a freehold flat within a larger residential development without leases or third party freeholders and there is no forfeiture because the unit holders own their freehold.
The Law Commission’s proposals for commonhold include that it should be possible to convert to commonhold without the unanimous consent of leaseholders and that the threshold for conversion should be 50% or 80% of long leaseholders of the flats in the building.
Considering the case for a Housing Court: call for evidence
The MHCLG publishes Considering the case for a Housing Court: call for evidence to consider the experiences of private landlords in possession actions in the County Court, the experiences of Court and Tribunal users and views on the transfer of property cases from the Courts to the First-Tier Tribunal (Property Chamber) and vice-versa.
01 November 2018
New regulations for recognising Tenants’ Associations
The Tenants’ Associations (Provisions Relating to Recognition and Provision of Information) (England) Regulations 2018 come into force with the aim of making it easier for tenants’ associations of residential properties in England to become legally recognised and to obtain information from landlords about other tenants who have a legal right to join a tenants’ association. One of the main changes is to reduce the threshold for an association to be legally recognised so that it must be recognised where it represents at least 50% of the qualifying tenants.
The consultation provides more detail on the Government’s proposals to ban the sale of leasehold houses and to cap ground rents in new residential leases. The key points are:
a proposed ban on granting long leases of houses which will apply to any houses developed on freehold land at any time and on leasehold land acquired from 22 December 2017;
a proposed cap to ground rents on new residential long leases at £10 per annum;
a proposal to give freeholders the same rights as those currently held by leaseholders to challenge the reasonableness of service charges levied through a deed of covenant or an estate rent charge; and
landlords and managing agents to provide leasehold information in connection with a sale within a fixed period of time (to be determined) and with their fees to be capped at an amount to be determined.
The Housing, Communities and Local Government Select Committee launches an inquiry into leasehold reform.
26 June 2018
Government guidance on leasehold ownership
The MHCLG publishes a How to lease guide for current and prospective leaseholders setting out the difference between leasehold and freehold property and the rights, obligations and implications of being a leaseholder.
introducing legislation to ban new residential long leases for existing or new build houses (except in specific circumstances, to be defined);
introducing legislation restricting ground rents in new leases to a peppercorn;
introducing a right of first refusal for lessees of houses, as exists for leaseholders of flats;
addressing the perceived loophole in respect of Ground 8 of the Housing Act 1988 whereby a landlord may seek possession of a long lease under Section 8 (designed for short tenancies) without having to comply with the statutory requirements in order to forfeit a lease for non-payment of ground rent; and
introducing legislation so that freeholders who pay charges for the maintenance of communal areas and facilities have rights to challenge the reasonableness of service charges.
22 October 2017
Improving the home buying and selling process: Call for Evidence
limiting the starting value and increase of ground rents on all new residential leases over 21 years;
updating Ground 8 of the Housing Act 1988 so that long leases over 21 years with an annual ground rent of over £1,000 in London and £250 outside of London cannot be an assured tenancy to close a perceived loophole whereby a landlord may seek possession of a long lease under Section 8 (designed for short tenancies) without having to comply with the statutory requirements in order to forfeit a lease for non-payment of ground rent. Where a lease is forfeited, as opposed to where a possession order is made under Section 8, the tenant has a right to apply for relief from forfeiture; and
providing freeholders of estates with equivalent rights to leaseholders to challenge the reasonableness of service charges via the First-Tier Tribunal (Property Chamber).
25 July 2017
Government publishes new Consultation on Residents’ Associations
The Government proposes to make it easier for a secretary of a tenants’ association to obtain contact information of qualifying tenants from a landlord to increase the likelihood of the association being formally recognised under Section 29 of the Landlord and Tenant Act 1985.
07 February 2017
Publication of Housing White Paper
The then DCLG publishes a Housing White Paper: Fixing our broken housing market, commencing a consultation on changes to planning policy and legislation in relation to planning for housing, sustainable development and the environment.
The paper details the Government’s intention to review the planning system, and the private rented market to, in the Government’s words, “make renting fairer” for tenants and the leasehold sector to “promote transparency and fairness” by reviewing ground rent structures and the sale of leasehold properties.