May 18, 2022

No regulation, but I may make changes to leasehold, says Shapps

The exchange of letters between Grant Shapps and Justice Secretary Ken Clarke give the clearest indication yet of his thinking on leasehold reform

Housing minister Grant Shapps has ruled out statutory regulation of the leasehold sector, but may well introduce measures to improve Leasehold Valuation Tribunals.

Furthermore, an announcement on the fraught issue of “exit fees” in the leasehold retirement sector, which are payable when a flat is sold, can be expected soon. These have been the subject of a prolonged inquiry by the Office of Fair Trading, which is due to make an announcement on the issue in mid-August.

Shapps says of leasehold: “I am therefore thinking about the issue and have not ruled out making other changes where I am able.”

His views are expressed in a letter to Kenneth Clarke, the Justice Secretary, who raised the issue on behalf of a pensioner in his Nottingham constituency. The exchange of letters took place last month.

They are the clearest indication of the current thinking of the Housing Minister on leasehold issues.

“I recognise that where problems arise over leaseholders’ homes, especially about the actions of managing agents, these can cause real inconvenience and, in some cases, distress. I appreciate that this is particularly true where elderly leaseholders are living in retirement leasehold developments. Disputes can arise from the nature of leasehold tenure, where both landlord and leaseholder have different, and sometimes conflicting, interests in the same property. The law therefore provides leaseholders with a wide range of rights to avoid these disputes or, where they arise, to enable them to be resolved.

“Overall, I believe that improvements should be driven by a more proactive approach from professionals in the leasehold sector, not by greater regulation, and expect landlords and managing agents to obey the law and act in a socially-responsible manner.

“Some leaseholders may however, find it stressful and burdensome to take a case against their landlord to a court or even a less formal Leasehold Valuation Tribunal. It may therefore be that the current processes could work more effectively or that leaseholders could receive more help in exercising their rights. I am therefore thinking about the issue and have not ruled out making other changes where I am able.

“The Department for Business, Innovation and Skills is responsible for the Office of Fair Trading and its investigations into “exit fees”. As Housing Minister, however, I have received numerous representations about this issue, and have a keen interest in the outcome which will soon, I hope, be reaching its conclusions. Depending on the outcome, I have not ruled out taking further steps to address this issue should it prove necessary.”

Kenneth Clarke added his thoughts on the subject in an earlier letter to the constituent.

“In the past over-regulation drove landlords out of the rental market. The last Government wanted to introduce a National Register of Landlords, regulation of letting and managing agents, and compulsory written tenancy agreements. These plans would have restricted supply, increased rent levels and reduced choice for tenants.

“The same principal relates to the management of retirement homes. The greater the regulation the greater the cost of management, which in turn is reflected on the the charge to tenants and leaseholders.”

Comments

  1. OMhostage says

    The reason this government won’t countenance change is because the Conservative party is in the pay of wealthy landlords. The case for complete deregulation has been made very well by the banking sector.

  2. And what of the Freeholders who are linked to Leaseholders? No recompense for us Freeholders in Grant Shapps statement. And, what is he going to do about Peverel Retirement as they are now calling themselves?

  3. I agree with Ewh. It seems freeholders will continue to be left out in the cold. We simply do not have any rights compared to leaseholders.