Not only did Theresa May stun everyone with her decision to call a ‘snap election’ but with the campaign now underway the wheels of Government have effectively stopped while we await the outcome of the nationwide vote.
Within the UK housing market, let’s be honest, any void or uncertain periods – especially when there is a need for ongoing change and action – will not be welcome, especially when we consider some of the key policy changes that are required.
There is also a danger that some of the progress that has been made might stall, and even be jettisoned, if we find ourselves with a new party in power, however unlikely this might seem if we are to take the opinion polls at face value.
The ink on the Government’s Housing Paper is after all, barely dry, plus we still await the ‘Call to evidence’ on the house-buying process itself which has been due since the middle of last year, but has yet to materialise. This is a monumental piece of work and, when the CA was briefed on its contents last year, it was commented how big a job the-then DCLG had on its hands in looking at every single area of the process.
And yet political change and upheaval has meant that we have yet to see the initial publication. Just prior to the General Election being called, there were whispers of its imminent distribution but given that June 8th will be the focus over the next seven weeks, and Purdah rules apply, that will not be the case. Instead, and of course depending on the result, we are now possibly looking at a summer publication date at the earliest.
As mentioned, while political types might be in their element when it comes to campaigning, the possibility of getting anything done over the short-term is now slim. This is perhaps most frustrating for those of us who have been following the real progress being made in the leasehold sector – even away from the fully-justified media furore around new-build leaseholds, escalating ground rents, consents, and the like, we were making considerable progress in terms of our focus on cutting Lease Administrators’ costs and delays.
Our Director of Delivery, Beth Rudolf, recently attended the latest All-Party Parliamentary Group (APPG) meeting on Leasehold and Commonhold, and even with holidays and the General Election having been called, there was a considerable number of MPs and major stakeholders in attendance to debate various cases of mis-practice and what can be done to rectify them and stop further instances befalling clients. The group currently has 70 MPs and you might expect more to follow, in particular, as the issue of new-build leasehold developments escalates in all seriousness across many more constituencies.
That said, of those 70 MPs, how many might be returned in June? They may not like to face up to their future Parliamentary lives but it could take some time to regenerate the APPG’s membership and to push for further action and reform. Indeed, we must also consider the fact that our Housing Minister, Gavin Barwell, might not win his seat and/or might be replaced in the inevitable Cabinet reshuffle that will follow a Conservative Party victory, or any other party’s win come to think of it.
It makes, as mentioned, for a very uncertain future for how the necessary change will be delivered. In terms of leasehold, we will continue to push for our aims and ambitions as outlined in our Strategic Plan, and with all the media interest around it, we at least have the chance of informing/re-educating potential and existing leasehold clients about what they could be getting themselves into, their options, and the importance of taking quality advice when it comes to the terms of the lease.
Clearly, agents also have a major role to play here. Some of the practises described at the APPG by the conveyancer’s recommended by developers are quite staggering. Clients are not aware of the conflict of interest, and we are told that these shady conveyancers are hiding it in plain sight by referencing ‘Chapter 3 of the SRA Code of Conduct’, nor are unwary buyers informed of the unusual restrictions on changing such things as carpets and blinds and the extortionate fees being charged for obtaining consent for such items.
We would not expect this of our membership and we would urge agents to ensure that when they are involved with such purchases, their clients do not necessarily simply opt for the developer’s choice of conveyancer because they are put under pressure to do so. It’s imperative that a quality conveyancer is chosen because they will be able to point out these issues and the client can then make an informed opinion on whether to go ahead.
Even more worrying is the treatment of down valuations on new builds; these are being passed off as allowances on completion meaning that the purchase price recorded at HM Land Registry is inaccurate by as much as £80,000. What can that be doing to the House Price Index? And the reason for doing it this way? We’re told it is so the developer can still meet its affordable housing quota – so they are ripping off the poorest homebuyer’s too.
It’s quite clear that a full review of leasehold, and indeed developer practices, is required and we would also urge all stakeholders to petition their MP – both now or if they change in the future – to join the APPG and to help bring this about.
Meanwhile, over the next seven weeks, we will watch the campaign unfold and hope that we can get back to a normal working Parliament/Government, that can deliver the changes necessary, in double-quick time.
*Eddie Goldsmith is Chairman of the Conveyancing Association and Partner in Goldsmith Williams