Housing Secretary Angela Rayner has announced a significant government crackdown on what she described as the "injustice" of the leasehold system, pledging new protections for leaseholders against "cowboy" property agents and hidden costs.
Speaking at the Labour Party's annual conference, Rayner revealed that the government intends to legislate for a new independent regulator to oversee the sector and will launch a public consultation to cap "rip off" administrative fees.
The proposed reforms aim to support an estimated five million leaseholders across England and Wales. These individuals, despite owning their homes, often face demands from landlords and management companies for basic permissions and administrative changes.
Rayner highlighted specific instances of exploitative charges, citing cases where leaseholders were asked to pay £250 for permission to keep a pet and £400 for changing a front door.
She condemned such practices, stating that leaseholders are often left "powerless against the vested interests that only take, while giving nothing back in return."
The government is currently working to ban new leasehold flats, a system the 2024 election manifesto labeled "feudal." Under the proposed Commonhold and Leasehold Reform Bill, ministers hope to shift toward a commonhold model where residents manage their buildings collectively. Rayner’s latest announcement specifically targets the network of management companies operating between leaseholders and freeholders.
While acknowledging that many businesses operate fairly, she warned that they are frequently "undermined by far too many cowboys, crooks and con artists."
According to the Housing Secretary, many buyers are misled into using in-house services without transparency, leaving them vulnerable to "vultures." The new independent watchdog will be empowered to set codes of conduct, establish standards for complaint handling, and mandate licensing for property agents.
Agents who fail to meet these standards could face the loss of their licenses. The government intends to implement these measures as quickly as possible.
Furthermore, the upcoming legislation will grant the government power to cap the administration and permission fees charged by landlords. These caps are expected to extend to freehold and privately managed estates, where residents often pay additional fees for cosmetic home improvements or requests for documents like building safety certificates. A public consultation will determine the specific rates for these caps.
These efforts supplement the government's previous commitment to implement a £250 cap on annual ground rents, a policy that experienced delays during the summer leadership change. While the government anticipates the ground rent limit will take effect by late 2028, some MPs have urged for an earlier implementation in 2027.
Rayner indicated her intention to go beyond simple caps, stating she is "capping and then scrapping" ground rents entirely.
During her speech, Rayner also reaffirmed plans to strengthen council powers to seize empty homes to address housing shortages and homelessness, a move that the Conservative party criticized as a "desperate" effort to reach the government's 1.5 million home-building target.
The government is already legislating, external to ban new leasehold flats, described in Labour's 2024 election manifesto as a "feudal" system where people own the right to occupy a property via a lease for a limited number of years from a freeholder, or landlord, who owns the land.
People excited at buying their own homes are "tricked" into using in-house services, meaning that "with no transparency or accountability, vultures can take advantage", Rayner added.
