Leasehold and Freehold Reform Bill starts its journey

The Leasehold and Freehold Reform Bill has had its first reading in the Commons, hailed by housing secretary Michael Gove as a “landmark moment for millions”.

Adding ‘People work hard to own a home.  But for far too long too many have been denied the full benefits of ownership through the unfair and outdated leasehold system.

That’s why liberating leaseholders forms a vital part of the Government’s Long-Term Plan for Housing.  So today marks a landmark moment for millions of leaseholders across the country, as we unveil laws to deliver significant new rights and protections, slash unfair costs and crack down on exploitation.’

At present, there are around 4.98 million leasehold homes in England, of which 30 per cent are houses and 70 per cent are flats.  The percentage of new-build houses sold as leasehold reached a peak of 15 per cent in 2016 and the proportion fell from there. In December, 2022, it was less than 1 per cent.

Of course what we need to do is make sure we phase out leasehold over time altogether,” Mr Gove told the BBC.

The main points of the Bill are:

  • 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

Timothy Douglas from Propertymark commented ‘ 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 Ministers 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.

See also comment in The Conversation here. 

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