Leaseholders are being encouraged to use one of five insurance brokers who have signed a pledge that could mean owners of flats in buildings with identified fire safety issues see a fall in insurance premiums.
Each broker has committed to stop the practice of sharing commissions with those who arrange buildings insurance, such as property managing agents, landlords, and freeholders. They also promise to have a cap of 15% on the proportion of the premium that brokers take which the Financial Conduct Authority says can be as high as 60% of the cost of the premium paid by leaseholders.
The brokers are: Lockton LLP, Bridge Insurance Brokers, Brown & Brown Insurance Brokers (UK) Limited, PIB Group Insurance Brokers/ St Giles, and Willis Limited (WTW). The firms will also share information about the building's insurance policy with leaseholders if requested, from 31st December.
Minister for Building Safety, Lee Rowley, says: “These brokers are to be congratulated on their decision; we now need to see further action from others in the broader insurance and broker industry to accompany it.”
The (residential) Leasehold Reform Bill will be included in the upcoming King’s Speech which is likely to reflect Housing Secretary Michael Gove’s ambition to drive a gradual phasing out of leasehold properties.
Quoting Whitehall sources, The Sunday Times explained that all new houses in England and Wales will have to be sold as freehold properties while ministers will also legislate to change the standard contract lease extension from 90 years to 990 years and remove the requirement for someone to have lived in the property for two years before they can negotiate an extension.
Ministers also plan to cap all existing ground rents to a ‘peppercorn’ rate and will run a consultation process of the issue within weeks, alongside the Bill.