Mark Chick, director of ALEP (the Affiliation of Leasehold Enfranchisement Practitioners) has recognized some key modifications that he believes Steve Reed ought to take into account as Secretary of State for MHCLG and has written the next open letter:
Pricey Secretary of State
On behalf of ALEP (the Affiliation of Leasehold Enfranchisement Practitioners), we wish to congratulate you in your new position at this pivotal second for land tenure and leasehold reform.
The leasehold enfranchisement sector is inspired by the federal government’s dedication to result in obligatory change. With Matthew Pennycook having set an formidable timetable for reform in his November 2024 Ministerial Assertion, many people hope the forthcoming Labour Get together Convention will present the chance to verify subsequent steps and supply readability for owners and practitioners alike.
Implementing the Leasehold and Freehold Reform Act 2024
Probably the most urgent issues is the standing of the Leasehold and Freehold Reform Act 2024 (LAFRA). Whereas this vital piece of laws was handed by the earlier authorities, a lot of it stays unimplemented. The federal government has promised to “act rapidly to offer owners with better rights, powers and protections” – however progress has stalled.
Please might you verify when the outcomes of the earlier authorities’s session on floor rents will likely be revealed, if in any respect? If they’re to be launched, how does the federal government intend to answer their findings and what’s the probably timetable? Readability can also be urgently wanted on the secondary laws required to deliver the LAFRA totally into drive.
This uncertainty is having real-world penalties. In a latest ALEP survey, greater than 80 per cent of members reported stalled lease extensions, falling transaction volumes and elevated prices – outcomes that had been by no means the intention of reform and are creating pointless complexity for customers.
Valuation reform and unintended market impacts
One other space of concern is valuation. Potential modifications to deferment and capitalisation charges might inadvertently improve, somewhat than cut back, the price of lease extensions. But the secondary laws to implement the federal government’s proposed valuation methodology has not been launched. Till it’s, each practitioners and leaseholders face uncertainty and threat.
Waiting for commonhold reform
We additionally await the publication of a Leasehold and Commonhold Reform Invoice, introduced within the King’s Speech in July 2024. Its promise to create a strong framework for commonhold – and in doing so to finish the sale of recent leasehold flats – is of profound significance to the market. Are you able to supply any indication of when the Invoice is prone to have its First Studying? Lowering uncertainty now would enable builders, lenders and owners to plan with confidence.
Unlocking stalled transactions and supporting development
As you’ll know, uncertainty within the leasehold enfranchisement sector impacts the broader property market. Delays and authorized ambiguity discourage funding and sluggish transactions, which in flip impede the federal government’s wider financial development agenda.
ALEP has labored constructively with authorities earlier than to form workable, consumer-focused reform. We’d be happy to proceed that collaboration, sharing sensible perception from throughout the sector to make sure laws achieves its supposed outcomes and avoids unintended disruption.
Yours sincerely
Mark Chick
Director, ALEP
