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MPs call for ‘wholesale’ leasehold reforms

Written by: Anna Sagar
A number of MPs have called on the government to urgently look at leasehold reform and the role of managing agents, with a key focus on service charges.

Barry Gardiner, Labour MP for Brent North, said in a debate about leasehold and managing agents that there was a “compelling case for wholesale reform” in this area.

He noted: “Millions of people in this country are having to reassess their lives and the possibilities that they thought were open to them — even on changing jobs — [because they are] trapped in their own homes, unable to sell, unable to move to a new job, or trapped in a one-bedroom home, unable to have any more children. Their plans are on hold. Their lives are on hold.”

Gardiner said that he wanted the case for an increase in service charges to be included in any reform, with one participant in the debate noting that there had been a 3,000% increase in service charges in one case.

Gardiner said: “I am glad that the Minister has agreed to take up that case and look into it further, because it is astonishing.”

Confronting ‘the scandal of managing agents’

He also stated that he wanted to follow up on the “scandal of managing agents often being at the centre of a web of companies all linked to the same beneficial owners”.

Gardiner pointed to Wembley Central Apartments in his constituency where one of the joint developers sold to a Canadian company, which then sold to Wembley Central in Jersey.

“They claim that it is for them to do the remediation work on the building, yet Sowcrest was the original freeholder and the developer itself. Those are the sorts of entangled webs that we are dealing with here,” he added.

Government action for leaseholders is ‘necessary and long overdue’

Matthew Pennycook, shadow minister for Levelling Up, said that it was “clear that relying on incremental improvement and the sharing of best practice to improve matters is simply not good enough”.

“Government action to address those practices and improve the lives of leaseholders is necessary and long overdue,” he added.

He noted that the case for property regulating managing agents and other property agents, has long been the case, and that the government had failed to act on recommendations made in a report in 2019.

Pennycook said: “The Government’s failure to act on the recommendations has had very real consequences. The burdens that homeowners have long laboured under because of the dysfunction of the property agent market and the inherent flaws of the leasehold system have become more acute over recent years as a result of the building safety crisis and surging inflation, the combination of which has pushed many already hard-pressed leaseholders to the brink of financial ruin.”

He said that the “deficiencies of the leasehold tenure are often the root cause of the abuse and poor service that so many homeowners experience at the hands of their managing agents”.

Pennycook said that Labour was committed to fundamentally reforming the leasehold system and would “support in principle any legislation that comes forward to that end”.

“Significant reform is therefore dependent only on whether and when the Government will finally publish the second part of its legislative agenda in this area. Despite being announced two years ago, there is still no sign of a Bill,” he noted.

Leasehold reform to be debated

Lee Rowley, Parliamentary Under Secretary of State for the Department for Levelling Up, said: “These are hugely important issues that affect people’s lives, so I absolutely appreciate the points that have been made regarding both leaseholds and the reforms needed in general.

“I understand the urgency, and I hope that we can say something more on that soon, particularly on building safety. We need to make progress on remediation, on top of the good progress that we have already made, but there is a long way to go.

He added: “While I am in post, I am committed to trying to make as much progress as possible so that the people who are affected can get on with living their lives again, as we all want them to.”

Michael Gove, Secretary of State for Levelling Up, Housing and Communities of the United Kingdom has said that he would introduce leasehold reform in the next parliamentary session.

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