Government consultation aims to improve leasehold
The government has launched a consultation on leasehold reforms, addressing service charges and transparency issues
The Association of Leasehold Enfranchisement Practitioners (ALEP) has welcomed the next stage of leasehold reform with a word of caution regarding the increasingly complex legal landscape that affects both consumers and professionals. The government is seeking feedback through a consultation titled Strengthening leaseholder protections over charges and services, focusing on pivotal aspects such as service charge transparency, litigation costs, and the regulation of managing agents. This consultation period, which will end on 26 September, is a step toward implementing changes outlined in the Leasehold and Freehold Reform Act 2024 (LAFRA). Despite its passage over a year ago, LAFRA is only partially implemented, and the legal context surrounding leasehold enfranchisement continues to evolve.
As part of the reform agenda, the government is also working on an imminent Leasehold and Commonhold Reform Bill, further complicating the legal landscape for leaseholders. A recent survey conducted among ALEP members highlighted concerns regarding this rapid change, especially its impact on consumers—primarily those looking to extend their leases or purchase leasehold properties. Alarmingly, the survey revealed that 50% of members felt the speed at which clients were making decisions about leasehold enfranchisement had slowed. Furthermore, 67% reported that extending a lease had not become any easier since LAFRA’s enactment, with none indicating that the process had improved.
In terms of business operations, 50% of the ALEP members noted a decrease in client work since LAFRA was introduced, with none reporting an increase. Reflecting on the situation, John Midgley, a director of ALEP, commented, “We welcome the government consulting with the sector. We are encouraging our members - who represent both freeholders and leaseholders - to take part and respond to this important new consultation so that their voices can be heard.” This sentiment underscores the necessity of addressing the challenges faced by both professionals and consumers in this evolving regulatory environment.