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Why the new build leasehold ban is a big moment for our industry

Without wishing to blow our own trumpet at this time, we did say at the start of the year that 2017 would be the year of leasehold change and reform, and given the cross-party support this issue has in Parliament, it’s been no surprise to see the government acting swiftly in this area post-election.

Some might say the government’s measures and proposals to tackle unfair leasehold practices, announced this month, don’t go far enough – and to some extent we would agree – however these are important first steps and we at the CA suspect that the ‘box’ has now been opened and more action will follow.

To that end, we are part of the Legal Sector Group and published our own leasehold reform proposals earlier this month – it would be nice to think that, having sent these to the new Housing Minister, they will be considered carefully and acted upon.


First, however, we have these new measures which in effect stop builders from selling new houses as leasehold, unless there are very special circumstances such as the land is owned by the Crown or the National Trust.

Ground rents, too, on these new-builds will be capped at close to zero, so that we do not see the escalating ground rent clauses that have hit the headlines recently and caused so many problems for those who own the leasehold, specifically those who want to sell on.

Of course, there are still some major hurdles to be overcome not least the situation for those who have already bought leasehold new-builds and what might be done to ensure that they are able to remortgage their home and/or sell it on.

Lenders have already moved in this area, imposing minimum lease terms, which could make it incredibly difficult to refinance, or for those potential purchasers to secure loans to buy these homes.

As agents, I’m sure you’ll know of situations where such properties appear to be almost impossible to sell, and this is clearly something that needs to be rectified. So, while we applaud this action which will stop such practices on future new-builds, we have to think about the many thousands of homeowners who are still left in a precarious position.

And then there are the practices of the Lease Administrators, which has been a major focal point for us. The delays and costs that are levied on existing leaseholders, and those wishing to purchase such properties, by a large number of Lease Administrators simply beggars belief. Their ‘charge what we want’ and ‘respond when we want’ attitude is a huge blight on our market and is a major reason why leasehold transactions, for example, can take weeks and weeks longer to complete than their freehold counterparts.

Plus of course there is no redress scheme to complain against such practices and therefore people are left out of pocket and helpless, waiting on the responses of an organisation that is absolutely vital if they wish to buy/sell their leasehold. We have been working with ethical Lease Administrators and have a series of proposals which will help secure greater transparency and fairness in this part of the leasehold sector.

It will continue to be a major focus of our lobbying work and we will be seeking to secure movement in this area as we have done in terms of this month’s outlined measures.

So, with just a short eight-week consultation period on these proposals it’s absolutely vital that we respond quickly and positively and that we also highlight the other areas which require further work.

This is a big moment for our industry and it is positive that we have a Government willing to act – let’s make sure that this is merely the start of the change we want to see.

*Eddie Goldsmith is Chairman of the Conveyancing Association and Partner in Goldsmith Williams


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