Leaseholders to Gain New Protections from Rogue Agents and Hidden Fees

The UK government will introduce new protections for leaseholders against "cowboy" property agents and excessive administrative fees, Housing Secretary Angela Rayner announced. The proposed legislation aims to create an independent regulator for property agents and will include a public consultation on capping fees that leaseholders are often required to pay to landlords for simple home alterations.

These measures are intended to benefit the estimated five million leaseholders in England and Wales who, despite owning their homes, can incur significant costs for minor changes or permissions. Rayner highlighted instances where leaseholders have been charged substantial amounts, such as £250 for permission to own a pet and £400 to change a front door, describing such individuals as "powerless against the vested interests that only take, while giving nothing back in return."

The government is already progressing legislation to ban new leasehold flats through the Commonhold and Leasehold Reform Bill, seeking to replace the current system with commonhold, where residents collectively own and manage their buildings. The new focus on management companies aims to address issues within the sector, which Rayner stated includes many reputable businesses but is undermined by a significant number of "cowboys, crooks and con artists."

The proposed independent regulator would be empowered to set codes of practice, establish conduct standards, and implement proper complaint handling procedures. Property agents would be required to obtain a license, and the regulator would have the authority to revoke these licenses if standards are not met. The government has indicated a desire to implement these changes as swiftly as possible.

In addition to oversight of agents, the planned legislation will grant the power to cap permission and administration fees charged to leaseholders. These caps would apply to freehold and privately managed estates, addressing fees for cosmetic changes and requests for documentation such as building safety certificates. The specific rates for these caps will be determined through a public consultation.

These forthcoming changes complement an earlier announcement of a £250 annual cap on ground rents for leaseholders in England and Wales. While this cap was originally anticipated for late 2028, there have been calls from Members of Parliament to expedite its implementation to late 2027. Rayner has indicated a commitment to not only capping but also eventually eliminating ground rents.

Rayner also discussed plans to enhance council powers to acquire vacant properties to address housing shortages and homelessness. The announcement of these housing-related initiatives comes as the government faces scrutiny over its target to build 1.5 million homes in England by the next general election, a goal acknowledged by Rayner to have only a "slim chance" of being met. The recent introduction of the "Your First Home" policy, offering first-time buyers a deposit loan of 2.5%, aims to assist prospective homeowners, similar to the previous Conservative government's Help to Buy scheme.