Government launch consultation on regulatory leasehold body
The creation of an independent regulatory body is being considered by the government to oversee the leasehold sector.
A six-week consultation was announced earlier this week by communities secretary Sajid Javid on the need for a regulatory overhaul of the sector, encouraging feedback submission on whether an independent body is required.
Speaking at the Association of Residential Managing Agents’ annual conference, Javid stated: “We are showing our determination to give power back to consumers so they have the service they expect and deserve, as part of my drive to deliver transparency and fairness for the growing number of renters and leaseholders.”
Drawing attention to the recent residential leasehold scandal and the need for an effective system, stating that the current redress process ” “actively disempowers tenants, leaseholders and even some freeholders, stripping them of many rights and making it extremely difficult to enforce those they do have.”
Across the leasehold as well as private rental sectors, the government will look at whether the law needs to be amended to require all letting and management agents to be both regulated and qualified in order to practice.
Welcoming the announcement of the consultation was Louie Burns. An avid campaigner against unfair leasehold practices, the managing director of Leasehold Solutions highlighted the need for a fairer process in order to improve the system for existing leaseholders.
“These reforms would be a welcome improvement over current legislation and would go some way to developing a fairer system and reducing the extortionate service charges that leaseholders are forced to pay just to alter or maintain their properties.
“Leasehold Solutions has been campaigning for reform to the leasehold sector for many years, and we are now finally starting to see evidence of tangible policies from government that will help to reduce the unfair costs faced by leaseholders.”
Despite championing the launch of the consultation, Burns also questioned whether more could be done within the sector.
“However, while we welcome the government’s backing for leasehold reform, we believe that far more can be done to make the system fairer. For example, one area that requires immediate attention is the flawed valuation models used to calculate the cost of lease extensions and freehold acquisitions, which favour the interests of freeholders and cause misery and profound financial hardship for many leaseholders.
“To address unfair valuations we have launched a new relativity graph in partnership with Leasehold Valuers, which has been informed by experts at the London School of Economics. Our new relativity graph will reduce the costs faced by leasehold flat owners when they need to extend the lease of their property, and we hope that it will be accepted and adopted across the sector.”