Industry News


London Mayor consults on plans for new intermediate rental tenure for key workers


Te Mayor of London Sadiq Khan has proposed a new form of tenancy with rents based on 40% of key workers’ incomes. Mayor Khan has outlined his proposals for


“rent–controlled” intermediate rental homes for key workers in a consultation paper for a new type of tenure, which he calls Key Worker Living Rent (KLWR). Khan believes there is demand for an


intermediate housing product for key workers who are not inclined or able to buy a home. He is proposing rents and service charges


are capped at 40% of average key worker household income aſter tax. City Hall’s maximum income eligibility threshold of £67,000 per year for intermediate housing will apply to KWLR homes, although the paper stresses this could increase. Te consultation paper suggests a potential


monthly rent and service charge benchmark of £1,099 for a one–bedroom home, £1,236 for a two–bedroom, and £1,373 for both a three and four–bedroom. Khan said the tenure could save key workers


up to £600 per month. Households would only be eligible for KWLR


homes funded by the Mayor if they live and/or work in London, do not own a home or have the means to buy one. Te paper said some KWLR homes may need


to be allocated to those who aren’t key workers, if boroughs and other housing providers have been unable to let them within the first three months of marketing, Te paper points out existing intermediate


tenures such as shared ownership or London living rent – which is designed to enable renters to save for a deposit –focus on home ownership. Te consultation will run until 3 March 2025. Khan promised to build 6,000 rent–controlled


homes as part of his election campaign earlier this year. Te consultation paper said he will work with local authorities, housing associations and house builders to develop these homes. Te paper says the mayor appreciates the


cap to rents and service charges might make it difficult for potential investors and developers to calculate the rental income they will secure from homes over time. He therefore suggests the GLA will review


the cap regularly to take into account changes to incomes and said City Hall is interested in views on whether to allow rents and service charges too increase above the income limit over time.


R


eforms to hand the country’s 5 million leaseholders greater rights, protections and control over their homes will be


brought forward next year alongside plans to bring the current leasehold system to an end, the Government has announced. Measures in the Leasehold and Freehold


Reform Act will be implemented at pace in the New Year to allow more leaseholders to buy their freehold or extend their lease without having to wait two years from the point they purchased their property. It will also allow homeowners to take over the


management of their building, and ensure they have more transparency of costs and can challenge unfair service charges, along with other changes to bolster homeownership. Te Government will also introduce its new


draſt Leasehold and Commonhold Reform Bill in the second half of 2025, a crucial step towards the next generation of homeowners benefitting from a more modern, functional and fit–for–purpose commonhold system. Further reforms will be made to tackle un–


regulated and unaffordable ground rents, end the injustice of ‘fleecehold’ where homeowners on freehold estates pay fees and remove the draconian threat of forfeiture. Tese changes, together with strengthened regulation of managing agents, will ensure existing leaseholders are better protected. Housing Minister Matthew Pennycook said:


“Millions of homeowners across the country will remember with fondness the sense of satisfaction, pride and security they felt when purchasing their own home. Yet, for far too many leaseholders, the reality of home ownership has fallen woefully short of the dream. “Te Government is determined to honour


the commitments made in our manifesto, and I am pleased to set out the steps we will take to provide relief to those currently subject to unfair and unreasonable practices and to progress the


6 | HMMDecember/January 2025 | www.housingmmonline.co.uk


wider set of reforms necessary to end the feudal leasehold system for good.” Te existing commonhold framework requires


modernising to ensure it works for all flats in the future, and the Government will take steps to make it the default tenure – starting with publishing a Commonhold White Paper in the New Year, followed by a consultation on the best approach to banning new leasehold flats. In January 2025 the Government will bring


forward more Leasehold and Freehold Reform Act provisions to give leaseholders more rights and security through removing the current ‘two–year–rule’ so leaseholders no longer have to wait two years aſter the point of purchase before exercising their right to extend their lease or buy their freehold. In the Spring, a package of measures will be


introduced to expand access and reform the cost rules and voting rights where leaseholders claim the ‘Right to Manage’ meaning more homeowners in mixed–use buildings can take over management from their freeholders – and leaseholders making claims will no longer have to pay their freeholder’s costs in most cases. Tose who achieve homeownership will also


be protected from unscrupulous managing agents through strengthened regulation to drive up the standard of service and ensure value for money. As a minimum this will include a mandatory professional qualification and a new basic standard for managing agents, and the government will consult on this next year. Further consultations will take place next year


on making it easier to challenge unreasonable service charge costs, setting valuation rates used to calculate the cost of enfranchisement premiums, and implementing new consumer protection provisions so those who pay freehold estate charges have more transparency of what they are paying for and the right to challenge at the First Tier Tribunal.


Sweeping reforms to give leaseholders more powers and protections


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36