Discover the transformative potential of the leasehold and freehold reform bill. This legislation aims to revolutionise property law, benefitting leaseholders. Key provisions include extended lease terms and service charge regulations. The bill is progressing through Parliament with widespread support. Amendments could further enhance protections for leaseholders.
The leasehold and freehold reform bill is a significant legislative proposal that aims to overhaul the existing leasehold system. It is designed to follow on from the leasehold reform (ground rent) act 2022, which effectively eliminated ground rents for new residential properties in England and Wales. By extending these reforms, the bill seeks to make it easier and more affordable for leaseholders to extend their leases or purchase their freehold, thereby reducing financial burdens and increasing property rights.
Introduced as part of a 2017 initiative to curb ‘feudal’ practices in the leasehold market, the government carried out an extensive consultation process resulting in over 6,000 responses. This consultation fed into the current bill, which is intended to enhance consumer choice and fairness. A major focus is to reduce costs associated with extending leases and to regulate service charges and other costs related to leasehold properties.
The provisions within the bill aim to increase the standard lease extension term to 990 years with a peppercorn ground rent. This marks a substantial increase from the previous 90 and 50 years for flats and houses, respectively. Significantly, the bill removes the two-year ownership requirement, allowing immediate lease extension or freehold purchase upon property acquisition. A further step includes banning certain long residential leases and capping ground rent calculations at 0.1% of the market value for premium calculations.
Currently navigating the legislative process, the bill has passed through the House of Commons and is now under consideration in the House of Lords. Its progression is closely watched as it undergoes debates, with an expectation that it will become law ahead of the impending general election. Secretary Michael Gove has expressed confidence in its enactment by the time of the election, supported by both Houses.
Potential amendments could significantly impact the bill’s final form. These include abolishing lease forfeiture rights and extending building safety provisions to a broader range of properties and leaseholders. Such changes underscore the bill’s ambitious scope to reshape leasehold laws and enhance protections for property owners.
The leasehold and freehold reform bill stands as a pivotal step in modernising property rights, promising significant benefits for leaseholders.
