News

MHCLG Publishes Remediation Acceleration Plan

Comment from Richard Goodman, Director General, Safer Greener Buildings Group.

All residential buildings over 11m in England already have a pathway to fix unsafe cladding which also protects residents from these costs. But, seven years after the Grenfell tragedy, it is clear that action to fix unsafe buildings has been too slow. Without decisive steps now, the risks and hardship could be with us for more than another decade. This cannot go on.

This plan sets out how we will fix buildings faster, identify remaining buildings still at risk and ensure that residents are supported through the remediation process. Through this plan, we aim that, by the end of 2029, all 18m+ (high-rise) buildings with unsafe cladding in a government-funded scheme will have been remediated. Furthermore, by the end of 2029, every 11m+ building with unsafe cladding will either have been remediated, have a date for completion, or those responsible will be liable for severe penalties.

These targets represent a significant acceleration and provide much greater certainty around when cladding remediation will be resolved.

Key measures included in the plan are:

  • action to identify buildings needing remediation through a review of 175,000 building records by the end of March 2025
  • the intention to introduce new legal duties on those responsible to take action and make their buildings safe
  • metro mayors convening regulators and preparing joined-up local plans to drive remediation in their areas
  • additional funding and guidance for regulators to intensify enforcement activity
  • new enforcement measures to hold those responsible to account
  • a joint plan with developers, published today, to fix buildings faster covering over 95% of buildings to be remediated by developers
  • action to begin accelerating remediation of social housing while working with the sector to announce a long-term strategy in Spring 2025
  • supply chain support to facilitate delivery as remediation pace increases
  • information on how we will hold those responsible for the building safety crisis to account
  • the extension of the Waking Watch Replacement Fund until the end of March 2026, and
  • further measures to ensure that residents are supported and protected throughout the remediation process.

It is only right that the construction industry contributes to making homes safe. That is why we are confirming the introduction of a Building Safety Levy on new residential developments which will raise around £3.4 billion for remediation. We intend that the levy will come into force in autumn 2025.

We also today launch a dialogue with the building insurance industry on whether and how a possible government intervention could bring down the high bills some have experienced which can be over £3,000 per annum.

A further consultation starts today on how we can ensure that leaseholders are only charged a fair and transparent insurance fee for work done in arranging insurance, rather than opaque commissions being charged to leaseholders.

Finally, we are taking several actions that address criticisms the Grenfell Inquiry Report made of the manufacturers of cladding and insulation products. This includes action towards preventing the most egregious companies, found to be part of the horrific failings that led to the Grenfell Tower tragedy, from being awarded government contracts. It also commits to system-wide construction products reform, including proposals on liabilities, robust sanctions and penalties against manufacturers.

The Remediation Acceleration Plan marks a pivotal moment in addressing the building safety crisis in England. We will work tirelessly to this end with resident groups and industry.

Housing Minister Commits to Strengthening Regulation and Driving Up Standards

Ahead of the BBC’s ‘Leasehold Day’ tomorrow, Housing Minister Matthew Pennycook MP has issued a statement on leasehold reform, including ‘at minimum’ mandating qualifications for property managers and likely regulation of managing agent firms. TPI urges every member to read the entire statement in detail.

The statement is generous and detailed, here is a high-level summary:

The 2024 Leasehold and Freehold Reform Act (LAFRA) has faults and needs fixing with further legislation. Also, it does not go far enough, for example ignoring some key Law Commission recommendations. Government can bring forward some bits of LAFRA in regulations and will do so next year. Otherwise, reform campaigners are asked to be patient while further reforms are delivered thoughtfully and carefully, not rushed through like LAFRA. Further primary legislation will be brought forward next year to extend right to manage provisions, reform the management of freehold estates, and much more. The BIG NEWS though, is mandating qualifications for professionals and likely regulation of property management firms.

Mr Pennycook said:

“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, and so we are 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. As part of our response to that report I can confirm that we will strengthen 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. We will consult on this matter next year.”

Today’s announcement is the result of many years of TPI’s efforts to raise awareness and elevate standards within the professional building management sector and the Government’s commitment is in large part thanks to the hard work and campaigning of the Institute and the invaluable support of our members to ensure competence and protect residents.

Andrew Bulmer, TPI CEO said:

“Housing Minister Matthew Pennycook MP has today delivered a long-awaited and very positive statement. He has set out a realistic timeline to deliver strong reforms for leaseholders and freeholders with managed estates. Rightly critical of the shortcomings of the rushed and botched Leasehold and Freehold Reform Act 2024, he makes a sensible case to bring forward some reforms in 2025, but seeks patience from campaigners for further reforms to be delivered in good time while allowing for due rigour and care. A sensible approach.

For property managers, the statement is very welcome indeed. The importance of professional building management is recognised. ‘At minimum’, qualifications for building managers will be made mandatory, while Lord Best’s recommended regulation of property agents will be high on his agenda.

It seems this government agrees with leaseholders, landlords and the profession itself: property management is not a job for amateurs.”

Read Housing Minister Matthew Pennycook MP’s full statement here.

The Draft Leasehold and Commonhold Reform Bill – Content and Clarification

Comment from the Association of Leasehold Enfranchisement Practitioners (ALEP)

By Shabnam Ali-Khan – Partner, Russell-Cooke

Following the rushed Royal Assent of the Leasehold and Freehold Reform Act 2024, further controversy has arisen. In the King’s Speech on 17th July, the new Leasehold and Commonhold Reform Bill was announced, but the full details of the Bill have yet to be released. We can expect more information on this in the near future. The current guidance highlights five key areas the Bill will address. We explore each of these in detail below.

1. Enact remaining Law Commission recommendations to strengthen leaseholders’ rights to extend their lease, buy their freehold, and take over management of their building.

The 2024 Act addresses most of the Law Commission’s recommendations on lease extensions and freehold purchases. These include offering a 990-year lease instead of the current 90 years, removing the two-year ownership requirement for flat lease extensions, and extending the right to acquire freeholds in buildings where the commercial area makes up to 50%. Additionally, landlords will now be responsible for their own costs in these processes, except in limited circumstances. The Act also introduces prescribed rates for premiums and eliminates marriage value for leases under 80 years.

So, what remains for the new Bill to address? Could these provisions be revised? It’s important to note that none of the leasehold reform sections of the Act which gained Royal Assent in June are currently in force.

Given the backlash by landlords concerning the removal of marriage value, it is likely that this will be revisited along with the other valuation provisions. The current human rights challenge mounted by Annington Properties last month may have prompted Labour to take another look at this. The Bill may outline provisions for an online calculator to assist parties in calculation of premiums, although this would hinge on whether the rates mentioned previously are prescribed. Currently the notices leaseholders and landlords need to serve in relation to flats are not prescribed. The Bill may provide an opportunity to consider this.

2. Reinvigorate the commonhold tenure by modernising the legal framework. Commonhold was introduced in 2002 as a way of enabling the freehold ownership of flats and avoiding the shortcomings of leasehold ownership. However, fewer than 20 commonhold developments have been established since the commonhold legislation came into force. The Law Commission put forward proposals for improving commonhold in 2020. The government intends to consult on options to restrict the sale of new leasehold flats so commonhold becomes the default tenure.

The 2024 Act did not address commonhold. It will be tackled by the new Bill. We may see some clear guidelines and provisions which make the process easier for leaseholders. Currently a building needs 100% agreement of its leaseholders to convert to commonhold. This may be reduced under the new Bill. However, if leaseholders are going to be forced to be part of a commonhold arrangement the Bill will need to improve lenders’ confidence in this form of ownership as well as providing owners with greater input in the process and how commonholds are run. Whether a ban on new leasehold flats will be introduced remains to be seen.

3. Regulate ground rents for existing leaseholders.

Despite government promises to cap ground rents this has yet to materialise. The ground rent scandal highlighted the onerous ground rents many leaseholders were facing with escalating, unaffordable rents making it difficult to sell or remortgage. The Bill may introduce caps to ground rent and potentially ban certain practices for new leases.

4. Strengthen the rights of freehold homeowners on private or mixed-tenure residential estates. The government will consult on the best way to achieve this.

The new Bill will aim to provide better protection for freehold homeowners against unfair charges and provide greater rights to challenge and more transparency. The Government has said it will consult on this to ensure freehold homeowners are better protected.

5. Remove the threat of forfeiture as a means of ensuring compliance with a lease agreement.

This means leaseholders will not risk losing their homes for breaching their lease agreements. Instead, the government plans to introduce fairer ways to resolve disputes and ensure compliance without such severe consequences. However, it is crucial this is balanced with protection for landlords against those leaseholders who persistently are in breach of their leases.

Where does this leave solicitors and other legal professionals? What advice should we be giving our clients?

Practitioners are experiencing challenging conversations with clients regarding the reforms and are feeling pressure to assist clients and prospective clients in making decisions, which is not within our remit. The main concerns are with lease extension and freehold purchase reforms, as we lack clarity on when and which provisions will take effect. However, it’s reasonable to expect that the non-controversial provisions, such as the introduction of 990-year leases and the removal of the two-year ownership requirement, will come into force. A few key tips below may help:

  • Encourage clients to keep updated with the reforms
  • Assist them in weighing up their options carefully and considering the commercial picture. For example if you are in the process of selling a flat and a short lease is causing difficulties in doing so, it may be preferable to bite the bullet and extend now
  • Advise clients to seek valuation advice to help make a decision – valuers may be able to provide advice on various scenarios
  • Be clear with clients that we can only set out the current position and what may come in, we cannot be certain what changes will be made and when – the ultimate decision rests with them
  • The landscape is uncertain and people are frustrated, so it is important we remain understand and empathetic as well as clear in our advice.

Ringley Group Launches New Service Charge Platform

The Ringley Group has launched a new platform, Service Charge Sorted, created to shake up the market and offer an alternative to hefty block or estate management fees.

Service Charge Sorted is the latest addition to the residential group, which manages a £12bn portfolio of apartments and properties for homeowners across the UK. Ringley has 30 years’ experience in residential real estate, advising major investors including Patrizia and Europa.

The new platform is designed for leaseholders in small blocks of flats and owners on private housing estates. It removes managing agent fees which, due to minimum fee thresholds, are often unfairly expensive for small blocks and estates.

Service Charge Sorted runs the service charge cycle from start to finish, from demanding the budget and preparing year-end accounts through to supporting owners selling their properties. It was created for small blocks and housing estates who own their freehold, have claimed ‘Right to manage” or have a management company as well as freehold investors.

Mary-Anne Bowring, Group MD of Ringley Group, said: “The process of managing service charges requires the right things to happen at the right time – Service Charge Sorted is an alternative to a managing agents’ minimum fee and will keep things running to protect against the numerous legal pitfalls that can leave the service charge void and uncollectable.

“It’s positive to be able to offer another solution, particularly as living costs continue to rise. Because new leasehold legislation is likely to be some way off, we expect to see an increase in the number of people claiming ‘Right to Manage’ – Service Charge Sorted puts some control back in homeowners’ hands and makes the process easier and fairer, while remaining compliant with leasehold laws.”

The Ringley Group is a RICS Tech Partner and Service Charge Sorted is regulated by the Royal Institution of Chartered Surveyors, the Solicitors Regulation Authority and the Financial Conduct Authority.

The Service Charge Sorted platform is as easy to use as online banking and provides a failsafe process to ensure service charge budgets get done, with additional legal and administrative support and advice for management issues. There are options to upgrade should major works be due or house meetings required, but it offers a low cost solution to take care of the legal and financial administration associated with service charges.