Kings Speech and the Leasehold and Freehold Reform Bill
Published / Last Updated on 07/11/2023
The government announced back in 2021 that leasehold reform in the UK would come in two stages.
Stage 1 – The Leasehold Reform (Ground Rent) Act came into force in June last year.
Landlords of regulated leases cannot ask leaseholder to make a payment of ground rent above a peppercorn rent for new leases after 30 June 2022, or 1 April 2023 for leases of retirement homes.
Stage 2 - The Leasehold and Freehold Reform Bill.
This long-awaited 2nd stage was included in the King’s Speech today. The King’s (Government’s) speech suggested that the Leasehold and Freehold Reform Bill will:
- Make home ownership for leaseholders easier and cheaper to extend leases, buy freeholds and for communal apartments/flats to control/take over management of the building,
- Expand the Leasehold Reform (Ground Rent) Act to remove ground rents and peppercorn ground rents for long term residential leases (the usual 999-year leases)
- Extend lease extension periods, when you extend your lease, from the standard 90-year extension to 990-year extension with ground rents down to £0.
- Remove the 2-year period for new leasehold owners to be able to extend their lease to being immediately available to extend to 990 years.
- Require landlords (freeholders) to issue information re buildings insurance, site management and financial records with a new maximum time limit.
- Leaseholder service charges to be reasonable, clear, fair and not mis-leading.
- Commissions to managing agents on arranging insurance protection to be replaced by clear administration fees.
- Ensure freeholders and developers must meet their liabilities regarding safety and remedial works where required e.g., fire safety regulations for buildings after the Grenfell tragedy.
- Ban leaseholds on new build.
- Capping existing ground rents on leasehold properties.
The Bill wording is not published yet, so we wait for the finer detail but the above is widely expected to be included in any new Bill as per the King’s Speech.