Category: Letting-Property

The MP for Brent North has campaigned to end the leasehold system for more than two decades, and advocates for replacing it with commonhold. Commonhold allows residents in a block of flats or estate to own the freehold of their building, and removes the time limit which people can live in their accommodation for. This system is used in the United States, Australia and across Europe.

Gardiner told PoliticsHome the leasehold system has inflicted human suffering on millions of people, and has trapped many of his constituents in homes they do not want to live in and cannot afford to sell.

“We haven’t begun to talk about the human problems here. About the people who have huge mental health problems, the people who have committed suicide,” he said, referring to the emotional toll he believed leasehold has caused for many.

“Many of them have found that they’re trapped, they can’t move…. We’re closing down their abilities to have families. They want to move to a larger property, but nobody will buy the one that they’re in. They can’t move. [Leasehold] is a nightmare for people.”

A leaseholder is a tenant who has paid to live in a property for a select period of time, and often includes apparent homeowners. Government data suggests long-term leaseholds usually last between 99-125 years.

Once the agreement ends, the property returns to the landlord, who owns the home and the plot of land. Government data suggests there are almost five million leasehold properties in England, which makes up 20 per cent of the current housing stock.

Under a highly technical amendment, Gardiner wants to ensure that freeholders — who lose the Right to Manage under the enfranchisement process — will not receive any funds from future service charge payments. The amendment would help make sure tenants pay their service charges to the new freeholder.

Service charges are costs residents pay to the freeholder which fund the upkeep and maintenance of a building.

Under the Right to Manage – a reform brought forward by former prime minister Tony Blair in 2002 – leaseholders can remove the managing agent or freeholder, and gain control of service charges. This can only happen if 50 per cent or more of existing residents vote for this change.

However, those who do not vote to gain control of the management of their building still have their lease with the old freeholder, and can be exploited by the old freeholder.

Gardiner is hoping that his amendment will prevent this from happening in the future – and cut off another income stream for freeholders.

The long-serving Labour MP said he was delighted the Labour Party was committed to overhauling the current leasehold system. He said it must be a priority for any future Labour Government to replace it with commonhold.

“God help us, if we get a Labour government, we must have this as a priority. Because millions, literally millions, of people in leasehold flats are sick to the back teeth of being treated as a money tree for their landlords,” he told PoliticsHome. “We know what our constituents are going through here, it’s purgatory.”

The Labour backbencher said he was confident Keir Starmer‘s bold position on leasehold would hold. Gardiner said if the Labour leader did renege on this commitment, there would be enough “strong voices” within the parliamentary party to pressure Starmer into implementing further reforms.

“This is something we have to do, and you will have trouble on your hands if you don’t,” Gardiner said, in a message to the Labour leadership.

The Labour Party has claimed it will end the “feudal” leasehold system. Lisa Nandy, the former Shadow Levelling-up Secretary, said the party would abolish leasehold within the first 100 days of office.

The Guardian reported that a future Labour Government would include a Leasehold Reform Bill within their first King’s Speech if the Conservatives failed to act.

Labour has pledged to adopt the proposals from the Law Commission which would make it easier for leaseholders to buy or extend their lease. Matthew Pennycook, the shadow housing minister, claimed on X, formerly known as Twitter, that it will be the responsibility of a future Labour government to “fundamentally and comprehensively overhaul the current system”.

One housing industry source told PoliticsHome they were concerned the Leasehold and Freehold Bill would reduce the quantity of Britain’s housing stock by removing the incentive to build new profitable leasehold properties. They claimed this would exacerbate the existing housing crisis and push house prices up even further. Research from Centre for Cities, a think tank, found that Britain has a shortfall of 4.3million houses.

Gardiner said this claim from the housing industry was “nonsense”. He said moving away from a leasehold system towards commonhold would be a “huge boost” for the UK economy. The Labour MP said leasehold was not a “fair” or a “free market” and had “all the hallmarks of an anti-competitive monopoly”.

Gardiner has produced a 40 minute documentary telling the stories of leaseholders trapped in homes they cannot afford to sell. It features residents across England and highlights the imbalance of power which keeps leaseholders “prisoners in their own homes”. It will be released by the end of January.

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The new £2bn grant scheme in England for projects such as insulation, unveiled yesterday by the chancellor Rishi Sunak as part of a wider £3bn plan to cut emissions, initially did not appear to include BTL landlords and homes in the private rented sector.

Hundreds of thousands of homeowners will receive vouchers of up to £5,000 for energy-saving home improvements, with the poorest getting up to £10,000, but Labour cast doubt on whether BTL landlords would qualify for the Green Homes Grant.

Labour yesterday called for a “broader and bigger” plan to cut carbon emissions and suggested that should include homes in the PRS.

Shadow business secretary Ed Miliband commented: “It appears there is almost nothing for the people who rent the 8.5 million homes in the social rented sector and private rented sector, which has the worst energy efficiency standards. That means one-third of people are left out.”

But ARLA Propertymark has welcomed the scheme, confirming that landlords will be able to apply for a grant.

From September, homeowners and landlords can apply for vouchers to help to fund energy-saving home improvements, an amount which the chancellor estimates will cover up to two-thirds of costs per household.

David Cox, chief executive, ARLA Propertymark, commented: “Since the withdrawal of LESA [Landlords Energy Saving Allowance], we’ve been calling for a simple grant scheme to help private homeowners and landlords make their properties more energy efficient.

“The announcement is a big step forward to ensure that they can take the necessary steps to do this and ultimately create a greener property sector in the UK.”

The way a residential building is constructed, insulated, heated, ventilated and the type of fuel used, all contribute to its carbon emissions, and can now seriously impact on the cost of running the property and even its value.

Buy-to-let landlords could reap significant competitive advantages by shifting to a ‘green’ model of potentially adding value to a home, and so many will welcome this new scheme.

Mary-Anne Bowring, creator of automated letting platform, PlanetRent, pointed out that the UK’s housing stock is some of the oldest in Europe.

She said: “This is not just bad for the environment but bad for our health too, with too many properties suffering from problems with damp and cold.

“It is important the government’s voucher scheme covers renters, especially as homes in the private rented sector tend to be older.”

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The UK Government passed into law the Coronavirus Act on Wednesday 25 March 2020 providing additional powers to deal with the Coronavirus outbreak including measures to suspend new evictions from private rented accommodation while the national crisis is taking place.

Under the Coronavirus Act, landlords will not be able to start proceedings to evict tenants for at least a three-month period. This includes possession of tenancies in the Rent Act 1977, the Housing Act 1985, the Housing Act 1996 and the Housing Act 1988.

WHAT DOES THIS MEAN?

When using either Section 8 or Section 21 notices to quit, landlords must give at least three months’ notice before they can apply to the court for possession. This applies regardless of which ground is used for Section 8.

WHO DOES IT AFFECT?

The changes apply to England and Wales only and came into force on 26 March 2020 (the day after the Coronavirus Act was passed) until 30 September 2020.

NEW AND EXISTING POSSESSION CLAIMS

Importantly, the change in law only applies to notices served on or after 26 March 2020. From 27 March 2020 the court service will suspend all ongoing housing possession action. This means that neither cases either currently in or about to go in the system can progress to the stage where someone could be evicted. This suspension of housing possessions action will initially last for 90 days, but this can be extended if needed.

PRESCRIBED FORMS

The Government has updated Form 6A Notice seeking possession of a property let on an Assured Shorthold Tenancy to reflect the change in the law which came into force on 26 March 2020. The Form 6A should be used by landlords in England up to 30 September 2020.

FUTURE CHANGES

The new rules mean that granting possession is not stopped completely, rather the Government has chosen to extend notice periods. However, the UK Government has the power to alter the three-month notice period to six months or any other period.

PROPERTYMARK RESOURCES

Propertymark has developed a Fact Sheet with details of the legislative change that will be published very soon. Propertymark members have access to the legal helpline for specific enquiries about the application of the law.

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Photo by Gustavo Fring from Pexels

What You Need To Know

Green Homes Grant vouchers worth up to £5,000 will be issued to homeowners in England to make their homes more energy efficient under a Government scheme being launched in September – here’s the latest info we have following an update issued on 4 August.

As part of the Green Homes Grant scheme, eligible homeowners will be able to use the vouchers to help pay for environmentally friendly improvements such as loft, floor and wall insulation or double glazing to replace single glazing.

Chancellor Rishi Sunak outlined the plans, which will see the Government put aside £2 billion for green home upgrades, as part of his economic statement in July. And the Government has now released more details about what the vouchers will cover and who’s eligible.

For more on the help you can get with the Green Homes Grant for energy efficient improvements, see our Free Insulation and Boiler Grants guide. Plus for more on the other big announcements in the Chancellor’s statement, see our Stamp duty cut and 50% off discounts when eating out MSE News stories.

How will the Green Homes Grant work?

The idea is that the Government will give homeowners in England vouchers towards the cost of energy efficient improvements, which should cover much – and in some cases all – of the cost. You’ll have to apply for a voucher once the scheme is up and running in September. You’ll then be able to spend it to improve your home.

The aim of the scheme is to help homeowners and promote energy efficiency, but also to help boost the economy during the coronavirus pandemic by creating jobs.

The Green Homes Grant applies to England only – so unfortunately won’t cover homes in Scotland, Wales or Northern Ireland.

Updated. What will the vouchers cover?

The Government has now, in its 4 August update, confirmed the full list of improvements covered by the scheme.

As expected, it’s more complex than it originally appeared. To qualify for any financial support, you’ll need to be installing at least one of the following “primary” improvements:

• Insulation, including solid wall, cavity wall, underfloor, loft or roof insulation.
• Low carbon heating, such as air-source or ground-source heat pumps, or solar thermal systems, which provide renewable ways of heating your home.

If you already have these measures installed, you can use the vouchers to install “top-ups” – for example, additional loft insulation so it reaches the recommended level – but not to replace what you already have.

The Government also adds that if you’re installing low carbon heating, you’ll also need to have adequate insulation in your home, though this can be installed at the same time as the heating.

Then if, and only if, you’re installing at least one of the improvements above, you’ll also be able to use the vouchers to install the following “secondary” measures:

• Draught-proofing
• Double or triple glazing, or secondary glazing, but only if you currently have single glazing – it won’t cover replacement double glazing.
• Energy efficient doors, where you’re replacing doors installed before 2002.
• Heating controls and insulation, including appliance thermostats, hot water tank thermostats, hot water tank insulation, smart heating controls, zone controls, delayed-start thermostats and thermostatic radiator valves.

But crucially, you can only receive funding for these secondary improvements up to the amount of funding you’re receiving for the primary measures. So for example, if you’ve received £1,000 towards cavity wall and roof insulation, you can only receive a maximum of £1,000 towards any secondary measures, such as double glazing or thermostats.

How much will the vouchers be worth?

For most homeowners, the vouchers will be worth about two-thirds of the cost of the energy efficient improvements, up to a maximum of £5,000 per household. For example, the Treasury says a homeowner installing cavity wall and floor insulation costing £4,000 would only pay about £1,320, with the Government contributing the remaining £2,680 through the voucher scheme.

But those on low incomes will be able to get more – in that case the Government will cover the full cost of the energy efficient improvements, so you won’t have to pay anything, and the vouchers could be worth up to £10,000 per household.

Of course, green improvements such as insulation can also help cut your energy bills, with the Government saying families could be able to save hundreds of pounds a year as a result.

Will anyone be able to get these vouchers?

The Government confirmed on 4 August that all owner-occupied homes (including long-leaseholders and shared ownership properties) will be eligible to use the general £5,000 voucher scheme – though it’s likely leaseholders and those with a share-of-freehold type lease will need to get permission from the (other) freeholder(s) before making any changes that affect the building. We’re checking with the Government how this will work and will add the information here when it’s released.

Landlords of private rented and social domestic housing can also use the scheme, along with park home owners.

It’s also confirmed new-build domestic properties and all non-domestic properties, for example commercial premises, DON’T qualify for the green home vouchers. We’re checking the definition of a new-build home for the terms of this scheme, and will update this story when we have the answer.

And while the Government has confirmed that the Simple Energy Advice service will suggest “appropriate improvements” to homeowners, it says there’s no requirement to use the measures it suggests and owners won’t need to have assessments of their homes. But it’s not yet clear exactly how the approval process for individual improvements will work – we’ve asked for more details and will update this story when we know more.

The Treasury has said it hopes the scheme will help pay for improvements in over 600,000 homes across England.

The boosted £10,000 vouchers, where households won’t need to pay anything towards improvement costs, will be for those receiving at least one income-based or disability benefit. Only owner-occupied homes or park homes will be eligible.

The qualifying benefits are income-based/contribution-based jobseeker’s allowance, income-based/contribution-based employment and support allowance, income support, pension ‘guarantee’ credit, working tax credit, child tax credit, universal credit, disability living allowance, personal independence payment, attendance allowance, carer’s allowance, severe disablement allowance, industrial injuries disablement benefit and housing benefit.

How can I apply for a voucher?

The Government says that homeowners will be able to access advice and support from the Simple Energy Advice service (SEA) about making their homes more energy efficient from “later this month” (August).

The SEA service will then suggest home improvements for which homeowners can apply for funding, and homeowners will be offered a list of approved registered tradespeople in their area to carry out the work.

Once the work is agreed, vouchers will start to be issued from “the end of September”.

Will any firm be able to do this – or just specific installers?

The Government says households will be offered a list of accredited tradespeople in their area who are registered with the scheme to carry out the work.

To be part of the scheme, tradespeople must register for TrustMark or Microgeneration Certification Scheme accreditation.

What about Scotland, Wales and Northern Ireland?

While this new grant only covers homes in England, if you live elsewhere in the UK there are other schemes that offer financial support towards making your home more energy efficient.

There’s full info in the links below, but here’s a quick rundown:

• In Scotland, the Warmer Homes Scheme offers financial help towards installing measures such as wall and loft insulation and draught-proofing if you’re a homeowner or private tenant who’s lived in your home for more than 12 months. You’ll need to fit certain criteria and be receiving certain benefits – check your eligibility via the link above. In most cases all costs will be met by the Scottish Government, though for more expensive improvements you may need to contribute – this can be paid for using an interest-free loan.Under the Home Energy Loan Scheme, owner-occupiers and private sector landlords can get interest-free loans to make energy efficiency improvements such as installing insulation, glazing and heating systems.You can also check area-based schemes run by local authorities in Scotland to see if you can get support with energy efficiency measures where you live.
• In Wales, the Nest Scheme offers free advice on improving home energy efficiency. It also provides free energy efficiency improvements such as insulation and new boilers for those who own or privately rent their homes and either receive a means-tested benefit or have a low income and a chronic respiratory, circulatory or mental health condition.
• In Northern Ireland, you could get a grant of up to £1,000 towards replacing an inefficient boiler that’s more than 15 years old through the Boiler Replacement Scheme, if your household income is less than £40,000.

If you own your home or rent it from a private landlord and have a total income of less than £20,000, you may be able to get grants of up to £7,500 to make improvements such as insulation, heating and window glazing through the Affordable Warmth Scheme.

It’s worth noting though that both these schemes are currently only considering urgent cases due to the coronavirus situation.

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