The government is under mounting pressure to accelerate leasehold reform as the body representing enfranchisement practitioners warns that delays are stalling transactions, inflating costs and undermining confidence in the property market.
In a letter to Housing Secretary Steve Reed, the Association of Leasehold Enfranchisement Practitioners (ALEP) said the Leasehold and Freehold Reform Act 2024, passed by the previous government, remains largely unimplemented and is creating “unnecessary complexity” for consumers.
Mark Chick (main picture, inset), ALEP’s director, said more than 80% of members surveyed reported stalled lease extensions and falling transaction volumes since the legislation was introduced without the necessary secondary regulations.
“These outcomes were never the intention of reform and are creating unnecessary complexity for consumers,” he warned.
CLARITY NEEDED
The government has promised to “act quickly to provide homeowners with greater rights, powers and protections,” but ALEP said progress had “stalled” and called for urgent clarity on several key issues.
One flashpoint is the consultation on ground rents, the results of which remain unpublished. ALEP is pressing Reed to confirm whether the findings will be released, how the government intends to respond, and what timetable will apply.
Without this, Chick warned, homeowners and practitioners face a “policy vacuum” at a critical moment for the sector.
UNCERTAINTY AND RISK
Concerns also centre on valuation methodology. Planned changes to deferment and capitalisation rates – used to calculate the cost of lease extensions – risk making lease extensions more expensive unless secondary legislation is brought forward.
“Until it is, both practitioners and leaseholders face uncertainty and risk,” Chick said.
Attention is also turning to the proposed Leasehold and Commonhold Reform Bill, announced in the King’s Speech last year, which would end the sale of new leasehold flats and establish a framework for commonhold ownership.
ALEP is urging the government to set out when the Bill will receive its First Reading, arguing that developers, lenders and homeowners need certainty to plan.
INTENDED OUTCOMES
ALEP warned that the current uncertainty is discouraging investment and slowing transactions, with knock-on effects for the wider housing market and economic growth.
“ALEP has worked constructively with government before to shape workable, consumer-focused reform,” Chick wrote. “We would be pleased to continue that collaboration, sharing practical insight from across the sector to ensure legislation achieves its intended outcomes and avoids unintended disruption.”
The intervention comes ahead of the Labour Party conference, where industry figures hope Reed will confirm the government’s next steps on leasehold and commonhold reform.
