Government unveils leasehold bill in King’s Speech
The government has revealed details of its Leasehold and Freehold Reform Bill as part of the King’s Speech, which is set to make it cheaper and easier for leaseholders to either extend their lease or buy their freehold.
As unveiled in the background briefing note published alongside the speech, the fresh leasehold rules will extend the standard lease term from 90 years to 990 years, while ground rent will become free.
Meanwhile there will be more transparency over leaseholder service charges, the practice of leaseholders being expected to pay for their freeholders’ legal costs will be ended, while leaseholders won’t have to own their house or flat for two years before they benefit from changes. Freehold homeowners on private and mixed tenure estates will have the same rights of redress as leaseholders.
In the speech itself, King Charles said: “My ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackling the exploitation of millions of homeowners through punitive service charges.
“Renters will benefit from stronger security of tenure and better value while landlords will benefit from reforms to provide certainty that they can regain their properties when needed.”
Ed Atkin, residential property partner at law firm, Shakespeare Martineau, said: “Amongst the 21 new bills introduced in today’s Kings Speech, property buyers will be celebrating the plans to make housing more affordable by changing the law relating to leasehold ownership. The new Leasehold Reform Bill is hoped to be passed into law before the next general election and is set to make much needed changes relating to leasehold ownership.
“The changes are set to modernise what is often described as the “feudal” leasehold system, and enjoy cross party support, with both the Labour and Conservatives parties having pledged to enact this legislation in their 2019 manifestos.
Katie Cohen, residential property partner at Keystone Law, said: “Whilst the King’s Speech today was somewhat vague in content stating that “my Ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold…” it is encouraging to see that the background briefing note published alongside the Speech puts forward reforms for the new Leasehold and Freehold Bill that applies to not only freehold acquisition but lease extensions and right to manage too. Practitioners have been calling for reform for many years now.”