There is a lot of talk at present about the Leasehold Reform Bill, so we wanted to provide an interim update on what we understand of the bill so far.
The introduction of the reform will give Homeowners more rights and protections over their homes and it will make it easier and cheaper for leaseholders to purchase their freehold – for example the reform will remove the requirement that a new leaseholder to have owned their house or flat for two years before they can buy or extend their lease. The reform will also allow owners to increase their lease terms to 990 years for houses and flats and give a more clear position on the service charges applicable to Leasehold properties.
The plan for the new Leasehold and Commonhold Reform Bill include;
- Banning new Leasehold flats and focusing more on Commonhold.
- Regulating Ground Rents – this will not completely get rid of Ground Rents being payable but will however ensure they are more consistent.
- They plan to end the forfeiture. Currently Leaseholders can lose possession of their Leasehold Properties for debts as little as £350.00.
- Implementing the law commissions recommendations on Lease Extensions, Freehold Purchasers and the Right to Manage.
- Making buying a leasehold or selling a leasehold property quicker and easier by setting a maximum time and fee for home buying and selling information
- A new legal right to buy out the ground rent without extending the lease at the same time.
Currently the Government are only producing a draft legislation for Leasehold and Commonhold Reform Bill and these are still subject to consultation. We read that the earliest the Bill could be introduced to Parliament will be in late 2025 but will likely take much longer.