On 29 September the government said it intends to introduce independent regulation of property agents for the first time. Agents would need a licence and appropriate qualifications. A regulator would set codes of practice for conduct and complaint handling, and could withdraw licences. No implementation date has been confirmed. The announcement referred broadly to property agents. A House of Lords written answer on 1 October confirmed that the regulation would cover managing agents of leasehold and commonhold properties, estate agents, letting agents and estate managers on freehold estates.
The licence is the headline change. I'd also watch the leasehold fees, because that is the first step with a clear mechanism attached. These fees are paid by leaseholders, meaning people who own a flat on a long lease, not by tenants who rent one. The government is taking powers to cap two kinds of fee. Permission fees are what a leaseholder pays to ask the freeholder for consent, and reports of the announcement in The Negotiator and Landlord Knowledge give keeping a pet and making minor alterations as examples. Administration fees include charges for providing documents, such as building safety certificates, and for notifying a change of mortgage provider. A consultation will decide which fees are covered and the level of any caps.
Leaseholders who currently pay these fees could benefit if caps are introduced. Those receiving these fees, including freeholders and some managing agents or management companies, may be the parties most affected, because a cap sets a ceiling on what can be charged. Which fees are capped, and at what level, is still to be decided. Tenants renting these properties are not the primary focus of the proposals, which are aimed mainly at leaseholders. However, a landlord who owns the flat on a lease could be affected when they request consent to sublet or make alterations.
The timing of the consultation has not yet been announced, so the fees covered and the caps themselves will only become clear once it opens.
Co-founder of Propalt and a property investor and developer for 20 years
