Leasehold reform Archives

Nearly three and a half million British households live in their leasehold flats, managed under a service charge arrangement with a managing agent.

Managing agents go by many names: property managers, building managers, block managers, estate managers, but they all – by and large – do a similar job. They manage multi-occupancy buildings – low rise and high-rise blocks of flats – or estates. Their duties include everything from building maintenance to keeping shared areas and spaces clean and tidy. In more recent years, since the Grenfell Tower tragedy, they have also taken on an increasingly complex set of tasks around building safety. As it stands right now, however, anyone could set themselves up as a managing agent – no qualifications, no experience, no oversight.

Residents are at the coalface of dealing with their managing agents. They pay a service charge so that day-to-day work on their buildings gets addressed in a timely manner (think everything from cleaning the hallways to fixing the roof to dealing with complex building fire and safety compliance issues).

Over the last few years there has been growing disquiet from leaseholders, that I and my colleagues have witnessed through our parliamentary inboxes, with concerns about managing agents – mainly relating to increased service charges, but also about service failures and delays, and value for money.

Whilst many managing agents operate in the right and proper way, sadly, there are still far too many who do not.

And whilst many do operate in a good way – supported with best practice and training by organisations like The Property Institute (the managing agent sector’s professional body) – the actions of the rogue and unscrupulous managing agents, as well as those who need to urgently pull their socks up and do a better job, are overtly impacting the reputation of the wider industry. There is a cross-party consensus that we need to root out the bad apples, but the question is, how?

Why statutory regulation is now unavoidable

I find it chilling that you, me, or anyone else could set up as a managing agent tomorrow.

Multi-occupancy buildings are getting ever-more complex, and managing agents are taking on gravely serious responsibilities – at its most acute; the lives, welfare and safety of those people who live within the buildings they manage.

That’s why I’m pushing for the statutory regulation of managing agents and an Independent Regulator of Managing Agents through my Private Member’s Bill. This would mean that these individuals and companies must be trained, competent, qualified and registered to be able to operate – all things that stakeholders, including the profession itself, have been campaigning on for many years. Indeed, my colleagues in the Labour for Leaseholders group have rightly been holding the sector’s feet to the fire to improve the way it delivers for residents. And this Private Member’s Bill is to complement – not take away from – the continuing work that the Government are doing to make good on Labour’s promise of sweeping leasehold reform prior to the last General Election, through the Draft Commonhold and Leasehold Reform Bill which is currently working its way through parliament.

Of course, one remedy of regulation will be to see off the poor practice that blights some leaseholders, but it also goes far beyond that- to the very core of ensuring the safety and wellbeing of those that live in these buildings.

Regulation will have a small cost, but that is a price worth paying and after all, the costs of failure are often even higher – legal fees, wasted time pursuing redress and extortionate fees on failed services.

Whilst regulation may not currently be in vogue, due to the necessity to secure growth urgently – it’s not hard to argue that the leaseholder product has been damaged commercially by the failure of the sector of managing agents. A focused regulator can provide much needed reassurance to consumers, a boost to sales and, ultimately, housebuilding as a result.

We regulate airlines, financial markets, dentists, and food hygiene standards – so why would we not want to regulate a sector that is about the safety of where millions of our friends, family and neighbours call home?

If you’re interested in supporting my Private Member’s Bill, why not take a moment to write to your local MP to give your views? You can find your MP’s contact details here.

Would you like to write for Red Brick? Email rose.grayston@gmail.com to pitch your piece (c.600-900 words)

Leasehold is the legal mechanism that makes the Community Land Trust model work. Without an exemption for CLTs, the draft Commonhold and Leasehold Reform Bill risks unintentionally undermining one of the few proven models for permanently affordable, community-controlled land and housing.

In the slow march to end feudal property arrangements since 2017, community-led and cooperative models have been largely overlooked. That’s a mistake, as these models could better achieve some of the Government’s aims.

Governments have been consulting and legislating on this since at least 2017. The Law Commission undertook a major study on leasehold from 2018 to 2020, and the Competition and Markets Authority looked at private estate management in 2023 and 2024.

The reform aims are right – to ban “feudal” arrangements in which homeowners are subject to unaccountable gouging by third-party landlords and managing agents.

But the Government’s solutions are narrow.

In its draft Commonhold and Leasehold Reform Bill, the Government wants to replace leasehold with commonhold for blocks of flats. Separate consultations propose moving to resident management companies (RMCs) for estates. Both hand ownership and control back to homeowners. It sounds good, but there are other models that are also resident-controlled and which should be considered.

A better model for democratic local stewardship

Community Land Trusts (CLTs) are already taking ownership of, and managing, blocks of flats and estates. Like commonhold they are resident-controlled and owned, and their statutory definition goes further to ensure they must be non-profit and act for the wellbeing of the community. They decommodify land and buildings in a co-operative structure.

But unlike commonhold and RMCs, their membership includes the whole local community in the neighbourhood, not just the homeowners in the block. Renters can have equal power and voice as owners. CLTs can take ownership of multiple developments across a neighbourhood, instead of setting up dozens of tiny companies and boards, one for each block of flats or new estate.

CLTs balance the interests of current occupants and future generations, ensuring that current occupants pay fair fees and that assets are looked after, while also protecting affordable homes and community assets from carpetbagging. They enable communities to act as wise stewards of their place. Many devolve day-to-day management of the homes and communal spaces to occupants, sometimes leasing them to resident associations or companies, while acting as a steward that can step in to help.

CLTs also have purposes broader than simply maintaining assets. They almost always leverage their ownership of homes and community facilities to proactively develop more, contributing to the Government’s growth and housing agendas. This in turn helps to attract more directors, make them more financially sustainable, and furthers the interests of the wider local community.

The benefit of this model over RMCs became very apparent in the CLT Network’s work on a major Ofwat-funded innovation project looking at ‘water smart communities’. We need to build more water-efficient homes with site-wide rainwater harvesting and flood mitigation. But it would be a tall order to ask small site-by-site RMCs to take responsibility for managing these complex assets, as well as the relationships with the Highways Authority, water companies and other stakeholders. It would be much more viable to do this at a town or neighbourhood scale, through adoption of potentially dozens of developments by a single local authority or CLT.

None of this is to say that commonhold and resident management companies are bad models. They’re just not the only resident-controlled model available, and have risks.

Why Community Land Trusts depend on leasehold

But the Government has largely ignored the CLT alternative. In its Draft Commonhold and Leasehold Reform Bill risks ruling them out. Leasehold is the legal mechanism that makes the CLT model work. By retaining the freehold of the land and granting long leases over individual homes and other assets, CLTs separate land value from building value and hold that land in common ownership for the long term. That legal separation is what enables the CLT to lock in affordability, prevent speculative windfalls, and steward assets for future generations.

Take two models common in the USA, There, CLTs buy the freehold of land which they lease to condominium associations (like commonhold associations), enabling occupants to self-manage under their stewardship. They also often buy flats in condominium blocks built by others, selling or renting them as permanently affordable homes. The homeowners and renters can all join the CLT, and a third of board places are reserved for them. Commonhold and CLTs could co-exist.

Ministers should protect CLTs in the Bill

In the two acts of legislation on leasehold reform to date, previous governments have recognised the value of the CLT model and enabled it by exception. CLTs have been exempted from the ban on leasehold houses and residential ground rents. But the draft Bill currently fails to carry this forward and would not permit the two co-existence models common in the USA.

The Government’s consultation on reducing the prevalence of private estate management arrangements similarly focuses on RMCs as a solution and gives little attention to community models like CLTs, though officials have shown interest.

The opportunity here goes wider than ending the feudal leasehold and estate management practices.

The Government is wrestling with the right way to help communities take back control. With the Pride in Place neighbourhood boards, the English Devolution and Community Empowerment Bill’s unspecified neighbourhood governance arrangements, and now with commonhold and RMCs, the Government risks creating a disjointed patchwork of community voice and control. At the neighbourhood level, communities struggle to stitch these together into something like a coherent approach.

Models like the Community Land Trust offer one solution, creating a general-purpose community stewardship body with a statutory footing that can stitch together new development, regeneration funding, saving existing assets, etc. It would embed democratic, accountable resident control across these priorities with a consistent, understood and robust model. Ministers should look again at a co-operative solution that communities themselves are championing.

Would you like to write for Red Brick? Email rose.grayston@gmail.com to pitch your piece (c.600-900 words)