What do the experts think of the recent government housing announcements?

publication date: Apr 16, 2018
 | 
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

Here's what the experts think of the recent government housing announcements

Following on from the recent government announcements on changes to the buying and selling process and the increased regulation of estate agents, letting agents and managing agents we have sourced comment from industry experts for their views.

To read about the changes visit: www.propertychecklists.co.uk/articles/biggest-property-changes

Leasehold changes recommended

  • Empower leaseholders to change managing agents if they perform poorly or break the terms of a contract;
  • Managing agents and freeholders will provide up-to-date lease information for a set fee and to an agreed timetable, ending the current situation where leaseholders are at the mercy of freeholders and their agents.
  • Restricting ground rents in newly established leases of houses and flats to a peppercorn (zero financial value);
  • Addressing loopholes in the law to improve transparency and fairness for leaseholders and freeholders;
  • Working with the Law Commission to support existing leaseholders – including making buying a freehold or extending a lease easier, faster, fairer and cheaper.

Beth Rudolf, a director at the Conveyancing association says:

Beth Rudolf

“We are delighted that the Government has confirmed that Lease Administrators will be required to provide leasehold information within a set timeframe and for reasonable fees.  94% of respondents to the Call for Evidence, both individuals and organisations, were in total agreement stating they should be required to respond to enquiries within a fixed time period and 87% of individuals (marginally more than the 85% of organisations) said there should be set maximum fees for responding to the information.”

Mark Chick, Director of the Association of Leasehold Enfranchisement Practitioners (ALEP) and Partner at Bishop & Sewell adds:

"ALEP supports and welcomes the latest property market proposals set out by the Government. It was very encouraging to hear that steps to improve legal loopholes, fairness and transparency within the leasehold industry formed part of the changes.

"Whilst the leasehold sector has been hitting headlines over the past year for the wrong reasons, ALEP has continued working 'behind the scenes' to help ensure standards within the leasehold sector are upheld and that best practice remains a key priority.

"Indeed, ALEP has been involved in discussions with the Ministry of Housing, Communities & Local Government regarding its latest consultation on tackling unfair practices within the leasehold sector, and we are closely monitoring the outcome of the Law Commission's consultation on commonhold.

"Standards across the property sector – particularly for those working within leasehold – need to be raised. We need to work together to ensure that the Government's latest proposals do not fall by the wayside. More education needs to take place for practitioners involved in the complex leasehold sector to ensure best practice continues, and ALEP will support that in any way it can."

Information on government recommending agent qualifications and increased regulation

  • Proposed mandatory and legally enforceable code of practice for letting and managing agents setting minimum standards for a number of things including service charges and dispute resolution;
  • Introduction of a nationally recognised qualification to practise, and continuing professional development;
  • Introduction of an independent regulator that owns the code of practice, is responsible for delivering the qualifications and has enforcement powers;
  • Estate agents will be required to hold professional qualifications;
  • Estate agents must be transparent for the fees they charge for referring clients to solicitors, surveyors and mortgage brokers;
  • National Trading Standards Estate Agency Team to be strengthened, enabling them to carry out more enforcement activity which includes the option of banning estate agents.

 Theresa Wallace, Head of Savills customer relations said of the changes:

Theresa Wallace

"It is a really positive move and we support the Government’s commitment to improving the consumers experience in the property market and raising standards. These changes could be the greatest steps taken and it is good to see nothing is being rushed through  but being thought through thoroughly to ensure any changes are wrapped up together so we end up with a Property market where all parties involved  benefit from the changes.  

Customers must receive a professional service where the supplier understands and complies with the law and meets the needs of their customers.

Regulation is the answer but it will take a lot of thought and preparation to make sure the model delivered is fit for purpose and can work in practice and enforcement will be one of the key changes required. The future looks promising but the delivery will be in the detail and keeping things as simple as they can be.”

Providing information about a property for sale upfront

  • Introduction of consumer friendly ‘How to Buy’ and ‘How to Sell’ guides;
  • Encouraging the use of voluntary reservation agreements to help prevent sales falling through and crack down on gazumping;
  • Encourage sellers to store and collect together relevant information (eg planning permissions, guarantees and certificates for works done, previous searches etc) in an effort to be ‘sale ready’;
  • Setting a timeline for local authority searches so buyers get the information they need within 10 days;
  • Establish a technology working group to engage users, industry and partners such as HM Land Registry to understand user needs for new digital technology and stimulate innovation in order to reduce completion time.

Beth Rudolf commented:

“We also welcome the Government’s incremental approach towards upfront provision of information, digitisation and increasing transparency in the process. It is important that in this market we see multiple small positive steps rather than attempting big leaps which could overstretch those required to introduce them.”

Here are my full thoughts on the changes but overall, it’s good to see that both the government and industry seem to be on the same page for once with regards to how to improve the property market and services to consumers.

As Glynnis Frew, Chief Executive at Hunters Estate Agents, says:

Glynis Frew

"Improving the standards of the industry is in everyone’s interests and many agents have campaigned for many years for regulation. An important part of that is training, we are delighted that the Government sees the importance of training also. Great ideas are only ideas until they become actioned and actioned well – everything, everything is in the execution.”

Choosing a letting agent - Belvoir Joining a landlord association - RLA 15 ways to speed up buying and selling legals - SLC

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