Former RICS Residential Chairman and north London estate agent Jeremy Leaf (main picture) has urged the Government to provide greater clarity on leasehold and commonhold reform ahead of today’s King’s Speech.
The Leasehold and Commonhold Reform Bill and the Building Safety Remediation Bill are both expected to feature in the legislative programme, with the property industry closely watching for further detail on how reforms will be implemented.
But Leaf warns that ongoing uncertainty is continuing to suppress activity across the flat sales market.
And he adds that uncertainty surrounding leasehold reform, building safety obligations and future management responsibilities is continuing to impact buyer confidence and transaction levels.
SOCIAL IMPACT
He says: “We would certainly welcome some clarity on leasehold and commonhold reform because more than anything we want to see more activity in the market. There is no doubt that the lack of clarity and uncertainty to date is preventing sales.
“If people can’t sell their flats or are nervous about buying because of that, it is going to have an impact on job and social mobility which is so vital to economic and housing market activity, particularly now, when there is so much nervousness around.
“But of course we appreciate this is a hugely difficult issue to reconcile between that desire to extend leases and purchase freeholds, cap ground rents and introduce commonhold – all of which have much merit – against the importance of ensuring the freeholders are happy to stay in the market and carry out some of the health and safety and improvement works which sometimes only professional freeholders can deliver.”
MANAGEMENT CONTROL
He adds: “That raises the other question which is control over management and more transparency over service charges. Of course, leaseholders want to seek that clarity but many would be reluctant to take on the responsibility of freeholders and managing agents for that work given the financial consequences which could be significant if things don’t go according to plan.
“It is all about trying to bring about change in a gradual way, not too quick or too slow. Too quick often results in too much upheaval and disruption which can create other challenges.
“With regard to building safety, similar factors apply. It is absolutely fundamental that building work is carried out appropriately to reduce the risk of problems occurring in the wake of the Grenfell disaster.
“However, the delay in implementing the changes required is compromising market activity and in some cases preventing new work going ahead at a time when there are so many other reasons for builders and developers not to put spades in the ground.”
