New Leaseholder Laws to Protect Leaseholders?

Communities secretary Sajid Javid announced that ministers are considering changing leaseholder laws to ensure a fairer environment for renters.

New proposals have been set out to crack down on overpriced service charges encountered by renters and leaseholders in the UK. These proposals also seek to abolish any ‘rogue’ letting and management agents.

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A crackdown on service charges is the latest in a long line of measures designed to protect UK tenants and leaseholders. From proposals to ban letting fees for tenants in December 2016, to the more recent proposal for a complete ban on the sale of newly built houses as leasehold, the UK is making marked moves in a positive direction for ‘generation rent’.

However, these newest measures would also be beneficial for leaseholders. Service charges are among the larger costs incurred by leaseholders, required to cover their share of the cost of maintaining their buildings. With the Department for Communities and Local Government estimating that there are 4.3 million leaseholds in England alone, total annual service charges have been estimated to be somewhere between £2.5 – £3.5bn. Quoting consumer research conducted by Which? In 2011 the DCLG claimed that leaseholders were “losing up to £700m a year due to excessive fees and hidden costs within their service charges”.

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Renters are also not immune to this. The Department for Communities and Local Government say that of the 4.5 million in the rental sector, many are being hit by costs for repairs and services and in some cases, are being ‘overcharged’.

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These new proposals will consider whether the sector needs overhauling or if there are ways to give the power back to leaseholders so that they have more say over their agents. There has also been a call for greater transparency and accountability so tenants and leaseholders understand what they are being charged for, and why they are required to cover those costs.


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