Leasehold reforms see further consultations and regulating managing agents

A Leasehold and Commonhold Reform Bill will be introduced to Parliament in the second half of 2025 with a central focus on commonhold that will consider other vital reforms to the existing leasehold system.

Continuing Labour’s manifesto promises, Pennycook also stated the legislation to tackle unregulated and unaffordable ground rents will be delivered.

• Remove the disproportionate and draconian threat of forfeiture to ensure compliance with a lease agreement.
• Consult next year on new reforms to the section 20 ‘major works’ procedure.
• Start preparing the transition away from leasehold by publishing a White Paper on reforms to commonhold early in 2025; and consult on the best approach to banning new leasehold flats so this can work effectively alongside a robust ban on new leasehold houses, seeking input from industry and consumers.

Will all property agents be regulated?

The UK Government has again looked at Lord Best’s 2019 report on regulating the property agent sector. This has been more prevalent following the recommendations in the final Grenfell Inquiry report, but it shouldn’t have taken a report to bring it back to the forefront.

A commitment has been given to strengthen the regulation of managing agents. A further consultation will take place next year.

Future consultations

Each consultation targets specific areas of concern and requires secondary legislation to ensure greater transparency and fairness.

• January 2025 will see the commencement of the removal of the two-year restriction on enfranchisement and lease extension claims from the point of property purchase so that leaseholders will no longer have to wait.
• In Spring 2025, the UK Government commence the provisions on the Right to Manage which increase access to the right for leaseholders in mixed-use buildings, alongside reforming costs and voting rights.
• No date has been set for the consultations on the details of the Act’s ban on building insurance remuneration.
• Summer 2025 will see the consultation on the valuation rates used to calculate the cost of enfranchisement premiums.
• 2025 is the only timeframe stated for a consultation on implementing the Leasehold and Freehold Reform Act’s new consumer protection provisions for homeowners on freehold estates, and on service charges and legal costs. However, these measures will be brought into force as quickly as possible after the consultation process, which is one thing the UK Government has, committed to.
• Options to reduce the prevalence of private estate management arrangements to end the injustice of ‘fleecehold’ will also see a consultation released in 2025 with no specific date set.

All the secondary legislation will need approval from Parliament, and fixing the Act’s serious flaws in further primary legislation before anything can be properly implemented.

Continuing our campaign to stopy leasehold being a life sentence

Propertymark remains steadfast in supporting our members and advocating for reforms that promote transparency, fairness, and affordability within the housing market. As these consultations progress and legislative changes take shape, we will provide updates and guidance to ensure a smooth transition.