Housing—drilling down on Levelling Up

15 February 2022

Property analysis: Alexander Campbell shares his views about the housing provisions set out in the Levelling Up White Paper, which was published by the Department for Levelling Up, Housing and Communities on 2 February 2022.

This analysis was first published on LexisNexis.

Proposals for reform

‘The UK has been like a jet firing on only one engine.’ With those words, on 2 February
2022, the Levelling Up Secretary, Michael Gove MP, committed the government to ending
geographical inequality between different parts of the UK and to improving living standards
and wellbeing across the country.

Recognising that some parts of the UK are thriving while others feel left behind, Gove
unveiled the government’s new Levelling Up White Paper (White Paper), which sets out 12
‘national missions’ designed to level up the UK, covering everything from reforming public
transport to improving literacy and maths in primary schools and reducing serious crime.
National mission number 10 aims to tackle the housing crisis in the UK. It aspires to ensure
that, by 2030, people renting their homes will have a secure path to home ownership and
that the number of non-decent rented homes will be reduced by half.

Access to information for home purchases

A key proposal to help home buyers and to make the process of purchasing a property less
difficult and expensive is the government’s ambition to ensure that ‘critical material
information buyers need to know’ will be available in digital format and from trusted sources.
The White Paper suggests that key among this ‘critical material information’ will be whether
the property is freehold or leasehold, if leasehold how long the lease has left to run and what
the service charge is. Presumably, for a leasehold property, how much the ground rent is will
be similarly important (note that the Leasehold Reform (Ground Rent) Act 2022, which
received Royal Assent on 8 February 2022, ends ground rents for most new long leasehold
properties).

As ever, the devil will be in the detail of these proposals. Few people who have ever gone
through the process of buying a home will dispute the government’s statement that it is a
time-consuming, costly and stressful process. If the process of obtaining information about a
property can be made more simple and consistent across the housing market, then that can
only be welcomed. However, it remains to be seen how this will be achieved and how
significant a difference it is really likely to make.

Information such as whether the property is freehold or leasehold and how long the
leasehold interest has left to expire are pieces of information which are usually readily
available. Indeed, they frequently appear on estate agents’ websites advertising specific
properties and, if not, they are easily ascertainable from the seller or through conveyancing
solicitors.

The reasons that property transactions fall through are many and varied, but the process of
buying a home can frequently be frustrated because of the complications of being caught in
a chain or by a new purchaser offering a higher purchase price and pricing out the original
buyer. The practical impact of the government intervening to give buyers improved access to
key information which is usually provided at an early stage anyway is questionable.

Empowering leaseholders

More welcome will be the White Paper’s proposal to improve the lot of leaseholders. The
government’s proposals recognise that for many people who purchase a leasehold property,
their dream of homeownership is tarnished by some of the seeming injustices which have
historically come to be associated with leasehold ownership. These include high and rapidly
increasing ground rents and poor service from unresponsive management companies.

To tackle these problems, the government is proposing to ban new leasehold houses and
has legislated to ban new financial ground rents (see above re the Leasehold Reform
(Ground Rent) Act 2022). In doing so, the government is moving away from the idea of
property ownership as a financial investment for freeholders and closer towards the
government’s stated aim in the White Paper of giving owner occupiers a sense of stability
and pride in their home. If these proposals evoke a sense of déjà vu, that is with good
reason—the government announced plans to tackle these issues as long ago as 2017. They
are a welcome step towards preventing the dream of homeownership from becoming an
expensive nightmare but only if the government now finds the political will to put them on the
statute book will they become a helpful reform rather than just a noble intention.

References in the White Paper to empowering leaseholders to take control of their property
management and to buy the freehold will be welcomed by leaseholders faced with
inadequate or unresponsive freeholders or property management companies. Meanwhile,
the government’s commitment to increasing take-up of commonhold flats by introducing
legislation on that issue during the current Parliament signals an ever-greater nudge towards
a system of property ownership which favours the owner-occupier rather than the investor-freeholder.

Generation Rent

While there is a strong focus in the White Paper on turning ‘Generation Rent’ into
‘Generation Buy’, there are nevertheless proposals to help those who continue to rely on the
rented sector.
The government’s proposal to legislate to end no-fault evictions under section 21 of the
Housing Act 1988 is not a new proposal, but will, if implemented, provide greater stability
and certainty for tenants in the private rented sector, reassuring them that they cannot have
their tenancy ended unless there is a good reason to do so.

Plans to introduce a National Landlord Register and to ‘take tough action against rogue
landlords’ will be welcomed but it remains to be seen whether the concrete proposals which
emerge will be robust enough to identify disreputable landlords who keep a low profile and
whose inadequate properties and poor practices are kept hidden from professionals and
authorities who could take steps to intervene.

Finally, the proposal to bring forward a Social Housing Regulation Bill so that tenants will be
given performance information to hold their landlord to account has good intentions, but will
be of limited value if tenants do not also have access to the practical means to challenge
their landlords when they fall short—something which has been made more difficult over the
last year with cuts to legal aid and to the courts’ budget