New leasehold measures approved by Government and industry

In a press release from the Minister of Housing, Communities and Local Government, James Brokenshire MP, has announced that it will accept many of the Law Commission’s recommendations for Event Fees.

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Over 40 property developers and freeholders have also signed a government-backed pledge to remedy some of the issues faced by existing leaseholders. The signatories include Taylor Wimpey, Bovis Homes, Barratt Homes, Persimmon, and Bellway amongst others.

The Government has stated that it will introduce a new statutory Code of Practice to ensure that Event Fees cannot be charged unexpectedly, should this be ignored, any fees breaching this will be unenforceable.

Transparency is also high on the Government’s agenda. Developers and estate agents will be required to make all fees fully transparent and fully communicated to potential buyers before purchase. This will allow prospective buyers make a fully informed decision prior to purchase.

NAEA Propertymark has long called for extensive reforms to the leasehold tenure. We supported the Law Commission in its quest for the introduction of codes of practice to require developers, operators and managing agents to bring Event Fees to the attention of prospective buyers.

Since becoming Communities Secretary, I have repeatedly made clear my ambition to end those exploitative and unfair leasehold arrangements that have no place in a modern housing market.

The new industry pledge – signed by leading freeholders and property developers – will further support existing and future leaseholders by protecting them from onerous fees.

It’s great news that leading names such as Taylor Wimpey and Barratt Developments have already signed up to the pledge, and I want to see others who have not yet signed up do the right thing.

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Rt Hon James Brokenshire MP Communities Secretary

Today’s news is a victory for those stuck in leases with onerous ground rent payments, charges for making alterations to their properties, and ultimately, unable to sell their homes.

Our Leasehold: A Life Sentence? report found that 45 per cent of those who bought a leasehold house in the last ten years, didn’t realise they were only buying the lease until it was too late. As a result, 62 per cent feel like they were mis-sold and the vast majority (93 per cent) say they definitely wouldn’t buy another leasehold property.

Buying a property is a huge undertaking and it should be an exciting time, but for thousands of homeowners, it’s led to financial difficulty as they’ve become trapped in confusing contracts with freeholders. The Government promised to ban the sale of new leasehold houses in 2017, but today’s pledge, backed by developers, is a triumph for those already tied into leases.

It’s also positive that the retirement sector has been included in the Government’s pledge. With event fees being reformed, older homeowners who have historically been stung with unfair charges when they become ill or die, will be treated fairly when they are at their most vulnerable.

These measures are a huge step in the right direction towards fixing Britain’s broken housing market.

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Mark Hayward Chief Executive | NAEA Propertymark

What we are doing to help you

Guidance

Propertymark's Understanding leasehold research
22 Mar 2019
Understanding leasehold

This guide provides Propertymark estate agents with best practice on helping people buy and sell leasehold property. Estate agents have a level of responsibility under the Consumer Protection Regulations to pass on all material information in respect of a lease.

Consultations

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14 Sep 2018
HCLG Committee Leasehold reform inquiry

The Government’s programme of work on residential leasehold reform must go further to help protect consumers.

Housing for older people

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20 Mar 2017
Communities and Local Government Committee inquiry — Housing for Older People

We responded to the House of Commons Communities and Local Government (CLG) inquiry, looking at the shortage of suitable housing for over 55’s in the UK.

Image attribution: "James Brokenshire Official MP Portrait" used under CC BY 3.0 / Cropped from original