Leasehold and Freehold Reform Bill moving through parliament
The government has finally started moving the Leasehold and Freehold Reform Bill through parliament, which will extend standard leases from 90 years to 990.
The bill will compel freeholders or managing agents to issue bills in a standardised format, with the idea being it’s easier to challenge.
Meanwhile the presumption that leaseholders pay their freeholders’ legal costs when challenging poor practice.
Elsewhere the bill will ban excessive buildings insurance commissions, and remove the requirement for new leaseholders to have owned their house or flat for two years before they can extend their lease or buy their freehold.
Timothy Douglas, head of policy and campaigns at Propertymark, said: “Further reforms to the leasehold system in England and Wales have been long anticipated and the Bill will bring much needed protections for leaseholders.
“Propertymark will support the UK government to ensure the specific details work in practice, whilst ensuring property agents understand the changes.
“It is also important implementation is well planned and managed as these reforms are significant and must ensure no leaseholder is left behind.”
Propertymark said it would respond to the UK government’s consultation by saying that 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.
Mick Platt, director of the Residential Freehold Association, hit out at the bill.
He said: “The government’s proposals to cap, or even abolish, ground rents would be a massive own goal. It will cost the taxpayer enormous sums of money to compensate investors while transferring the wealth to thousands of buy-to-let landlords and leaving ordinary leaseholders with burdensome legal responsibilities and escalating service charges.
“The government’s own research shows there is limited interest from leaseholders for this kind of intervention. It’s time for Mr Gove to stop ignoring the evidence and start bringing forward sensible reforms that would actually improve the tenure.”