Leasehold Solutions, the UK’s leading leasehold enfranchisement specialists, has welcomed yesterday’s announcement by the Communities Secretary, Sajid Javid, that the Government is considering creating a new independent regulatory body to oversee leasehold and private rented management.
The Government is seeking views on whether regulatory overhaul of the sector is needed to fix the problems in the property management industry during a six week consultation. The consultation will also seek views on whether a new independent regulatory body is needed to oversee the leasehold sector.
Mr Javid unveiled the plans at the Association of Residential Managing Agents’ annual conference on 18 October, which he said will to help create “a fairer property management system that works for everyone.”
He said: “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.”
Mr Javid also called for an end to the “unjustified use of leasehold in new-build houses” and said that the current system of redress “actively disempowers tenants, leaseholders and even some freeholders, stripping them of many rights and making it extremely difficult to enforce those they do have.”
Louie Burns, Managing Director of Leasehold Solutions, said: “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.
“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.”