You might well have felt a touch of déjà vu on hearing the news that the Labour government plans to bring an end to the current leasehold system, making commonhold the ‘default’ tenure during this Parliament.
Previous government administrations – albeit of a different political hue – promised to do something similar. You will have guessed that the fact this new iteration has had to announce the same thing is indicative of the result that was achieved.
However, let’s not judge this attempt too harshly, because as a representative body, we have been campaigning for over a decade on firstly securing leasehold reform and, subsequently, trying to show the opportunity that a move to commonhold might deliver.
Welcome suggestion to improve standards and regulation
Alongside this announcement, we have also had a commitment from housing minister Matthew Pennycook to regulate property agents and adopt the Regulation of Property Agents (ROPA) recommendations. It has been something of a head scratcher – I’m sure for many within the property industry – that we have had a situation where agents have not been regulated while everyone else is.
Certainly, at the Select Committee inquiry into how to improve the home buying and selling process, there was no one who presented oral evidence – including myself –that thought the status quo, when it came to property agents, could continue.
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The ROPA recommendations were supported by all, and the overriding message was that unless agents were regulated, then we would continue to see many flouting the law, particularly in terms of leasehold management, simply because they do not know about it.
Again, though – to give credit where it’s due – the government has grasped the importance of regulating property agents, and it has said it will introduce minimum qualifications.
The wait to reform leasehold continues
Moving back to leasehold reform, it has said it will introduce its draft Leasehold and Commonhold Reform Bill in the second half of 2025. This is perhaps not ideal given that it should have all the necessary evidence and consultation responses in order to bring this to Parliament on a much quicker timescale.
On this very point, it says it will publish a Commonhold White Paper in the new year, plus have further consultations on “making it easier to challenge service charge costs, setting valuation rates used to calculate the cost of enfranchisement premiums, and implementing new consumer protection provisions so those who pay freehold estate charges have more transparency of what they are paying for and the right to challenge at the First Tier Tribunal.”
Again, not to throw mud at this, but the previous government held a plethora of consultations that covered off much of this and more besides. Instead of going out again to the industry and asking the same questions in order to get the same answers back, we might ask them to use the responses they already have because the solutions to these problems will lie within.
The government also has plenty of outside resources and information to draw upon, perhaps most notably the Law Commission Reports from the start of this decade. At this time last year, the then government held its own consultation entitled Modern leasehold: restricting ground rent for existing leases, which must have generated a whole host of responses that could be utilised.
Getting on with it
The point being that we have been discussing this issue for so long, and been responding formally to various consultations so frequently, that to have another round of them seems futile, when the government could utilise what’s been provided before and focus on delivery.
Of course, this all feels very familiar because we’ve felt it all before.
Further delay and further consultation only provide time for inaction or for events to get in the way of delivering reform. We acknowledge this government has much to do, but in this area it has much to go on. A further round of asking for the information it already has seems pointless when the real benefit will be found in the doing, not the (re)asking.
What this shouts out to me is that we need a cross-party Property Commission, supported by the industry regulators and representative and trade bodies, so that we have a long-term strategic plan for housing, not 16 different housing ministers with their own special advisers, who leave within months and their project is taken over by a new minister who wants to show how they think differently.
Imagine the cost saved if all that consultation and ministerial briefing was avoided by having the continuity of a Property Commission supporting housing now and through every Parliament.
