Last month, we sent you an investment update about the emerging impact of external wall surveys (EWS) on the Regional Capitals fund and the wider UK residential property market.
Since then, there have been a number of potentially encouraging political developments, on which we wanted to update you.
The Lords amendment to the Fire Safety Bill
Two weeks ago, the House of Lords passed three amendments to the Fire Safety Bill which included banning leaseholders from being forced to pay fire safety remediation costs - i.e. meaning that our fund may not have to bear the cost of works required. The amended Fire Safety Bill will now return to the House of Commons where MPs will vote on whether to pass it into law.
Meanwhile, last week, the Housing Committee issued a report on the government’s draft Building Safety Bill (a more detailed follow up to the Fire Safety Bill), criticising the government for requiring leaseholders to pay for remediation works on historical defects that clearly are not their fault.
It is also encouraging to see a growing number of MPs, including Conservative MPs, expressing concern about the impact of EWS on leaseholders.
Why we’re inviting you to write to your MP
Despite these developments, the outcome is far from a foregone conclusion - the government has a sizeable majority, and these changes are unlikely to pass unless a majority of MPs can be convinced to support them. However, recent developments highlight 1) that the current situation is a political choice, which could be changed and 2) that leaseholders are not to blame for these works being required.
We invite you to write to your MP asking them to support the amendment to stop leaseholders, including our fund, from bearing the costs of remediation work.
Here’s how to find your MP’s contact details:
Enter your postcode, location or the name of your MP and click ‘search’
Select your MP from the results and click on their profile, which will include their email address and other contact details
What the amendment could mean for Bricklane
Our strong view is that leaseholders should not be liable for the cost of remediation works - if this amendment is passed, it could be the case that the recent cost provision on the Regional Capitals fund is removed. Per the previous update, there remains a risk that support for our fund is limited by EU State Aid rules to c. €200k.
We are in communication with the government about a potential exemption, given we represent a large number of small investors who have invested through the government-supported REIT regime, that is designed to encourage collective investment in real estate. It is worth including the nature of your interest in the matter (alongside any concern for the wider situation) in any communication, to ensure your MP is aware of our specific situation.
You can see recent news coverage of this issue here.
We will continue our efforts to resolve this situation as quickly as possible.