The Secretary of State for Levelling Up, Housing and Communities Michael Gove, MP has stated it should be law by the time of the next General Election.
It is clear now to the UK Government that the leasehold system is unfair and outdated, and liberating leaseholders forms a vital part of their long-term plan for housing and will deliver significant new rights and protections, slash unfair costs and crack down on exploitation.
House owners will benefit first
The sale of new leasehold houses will be banned in all but exceptional circumstances, so every new home in England and Wales will be freehold from the outset.
There will be a limit on the amount a freeholder can charge for providing the information a leaseholder needs to sell their property. The freeholder will also have to fulfil such a request within a set timeframe, which should help to speed up property transactions.
Key features of the Bill
The headline content is already known, after it was announced in the King’s Speech on 7 November 2023.
- An increase in the standard lease extension from 90 years (or 50 years in flats) to 990 years
- Greater transparency over service charges by making freeholders or managing agents issue bills in a standardised format that is clearer and easier to challenged
- Making it easier and cheaper for leaseholders to take over the management of their property
- Scrapping the presumption that leaseholders pay their freeholders' legal costs when challenging poor practice
- Banning opaque and excessive buildings insurance commissions for freeholders and managing agents
- Removing the requirement for a new leaseholder to have owned their house or flat for two years before they can extend their lease or buy their freehold
Consultation is underway to determine the best way of reforming rules on ground rent for existing leaseholds, the outcome of which will feed into the Leasehold and Freehold Bill.
The only option to properly level the playing field would be to set all rents at one peppercorn – as has already been done for new leaseholds by the Ground Rent Act 2022.
Representing our members
Propertymark will continue to work with the UK Government to ensure any new legislation is evidence-based and fit for purpose.
Reform of the leasehold system is long overdue, and it’s vital that the opportunity to ensure the market works for both agents and homeowners isn’t missed.
VIRTUAL ROUNDTABLE WITH DLUHC
Given the significance of this consultation, we have organised a round table event on Wednesday 6 December between 11:00 and 12:00. Officials from the Department for Levelling Up, Housing and Communities will attend, and members can reserve a place by contacting our Policy and Campaigns team at [email protected].