Leaseholders will be able to more easily challenge extortionate service charges subject to a consultation on the subject.
Matthew Pennycock, housing minister, told Sky News: “The system has some inherent inequities in it that do allow leaseholders to be gouged and particularly when it comes to managing agents there are unscrupulous people out there.
“They are abusing leaseholders and there’s poor practice.
“The reforms we are announcing… and reforms that are to come are going to bear down managing agents and ensure the sector as a whole is properly regulated.”
The government has announced a consultation on service charge and buildings insurance transparency, litigation costs and regulation of managing agents.
The consultation period runs until 26 September, and comes as the Leasehold and Freehold Reform Act 2024 is only partially implemented – as it was rushed through parliament at the end of Rishi Sunak’s tenure as Prime Minister.
John Midgley a director of ALEP (the Association of Leasehold Enfranchisement Practitioners) said: “We welcome the government consulting with the sector.
“We are encouraging our members – who represent both freeholders and leaseholders – to take part and respond to this important new consultation so that their voices can be heard.’’
The government is also consulting on its imminent Leasehold and Commonhold Reform Bill, creating a complicated legal context for leasehold enfranchisement.
In a recent survey, some ALEP members said extending leases have becoming more complicated due to the enactment of the Leasehold and Freehold Reform Act.