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UK Parliament publishes a written statement in relation to Leasehold and Freehold Reform

Nov 28, 2024 | UK Parliament

Link(s):Written statements – Written questions, answers and statements – UK Parliament

Context

Matthew Pennycook MP, Minister of State for Housing, Communities and Local Government, has published a statement to the House of Commons on Leasehold and Commonhold Reform.  In the statement, he included information about an intention for Government to Consult on banning insurance commissions for landlords, Property Managing Agents (PMAs) and freeholders being charged to leaseholders through a service charge.

Any brokers who deal with, or who are, or who own, PMAs need to be aware of this and its implications.

Key points to note and next actions

  • Pennycook said “We will go out to consultation very shortly on the detail of the Act’s ban on buildings insurance remuneration such as commissions for landlords, property managing agents and freeholders being charged through the service charge and their replacement with transparent and fair fees.”
  • Pennycook also stated that Government will, next year, look to consult on the Act’s provisions on service charges and on legal costs, bringing these measures into force as quickly as possible thereafter.  He also stated that it is important that landlords, agents and other key actors in the sector are aware of their responsibilities.
  • In the King’s Speech, the Government made clear it would publish an ambitious new Draft Leasehold and Commonhold Reform Bill in this parliamentary session that would be subject to broad consultation and additional parliamentary scrutiny. The intention is that it will be published in the second half of next year.  Government also intends to act to protect leaseholders from abuse and poor service at the hands of “unscrupulous managing agents”.
  • Pennycook also acknowledged that managing agents play a key role in the maintenance of multi-occupancy buildings and freehold estates, and their importance will only increase as we transition toward a commonhold future,  As such, Government is looking again at Lord Best’s 2019 report on regulating the property agent sector, particularly in light of the recommendations in the final Grenfell Inquiry report.
  • Pennycook intends to strengthen the regulation of managing agents to drive up the standard of their service. As a minimum, this should include mandatory professional qualifications which set a new basic standard that managing agents will be required to meet.  Government will consult on this matter in 2025.”