On 21st November 2024 Housing Minister Matthew Pennycook gave an update to Parliament on this area of law pledging to bring leasehold to an end and to implement the changes enacted by the Leasehold and Freehold Reform Act 2024 (the Act).
More particularly the Government has committed to:
- Removing of the ‘two-year rule’ that meant leaseholders had to wait two-years from becoming the registered owners of their property to extend their leases in January 2025.
- Enacting the Right to Manage measures in the Act which increase access to the right for leaseholders in mixed-use buildings, alongside reforming costs and voting rights during the Spring of 2025.
- Before the end of 2025 to consult with stakeholders and delivery partners on bringing in further changes set out in the Act and how they will operate, including:
- a ban on buildings insurance remuneration;
- changes to the valuation rates used to calculate the cost of enfranchisement premiums;
- new consumer protection provisions for homeowners on freehold estates; and
- increasing service charge transparency and decreasing legal costs paid by leaseholders.
What else can we expect?
In the second half of 2025, the Government’s proposed Draft Leasehold and Commonhold Bill will go further than the 2024 Act.
Prior to the Bill, a Commonhold White Paper will be published as part of the Government’s plan to transition away from leasehold to a more modern, fit-for-purpose commonhold system, to be followed by a consultation on banning new leasehold flats.
The Government also intends to bring forward its commitments to:
- tackle unregulated and unaffordable ground rents;
- remove the landlord’s right to forfeit a lease (such as when a landlord has the right to regain the property where a leaseholder has breached their lease, this could be a late payment);
- Bring reforms to the section 20 ‘major works’ procedure that leaseholders must go through when they face large bills for service charges for major works;
- Stop unscrupulous managing agents by strengthening regulation of the sector, particularly in light of the recommendations in the final Grenfell Inquiry report, including mandatory professional qualifications for agents as a minimum; and
- Reduce the prevalence of private estate management arrangements (where homeowners on freehold estates pay management fees and costs for estate maintenance services).
For more information on any of the above changes please contact Lucy Riley on 0345 646 0406 or complete an online enquiry form and she will be in touch.