Leasehold Reform is Again on the Agenda (1)

Date: 01/12/2023
Author: Kate Bullen
Company: AFG Law Limited

As leading conveyancing experts, AFG LAW welcome the recent news in the King’s Speech that Leasehold Reform is again on the agenda.

Ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackle the exploitation of millions of homeowners through punitive service charges.

This follows on from the Leasehold Reform (Ground Rents) Act 2022, which put an end to ground rents for new, qualifying long residential leasehold properties in England and Wales.

So, just what does this mean?

• The Bill mentions proposals to make it easier and cheaper for existing leaseholders in houses and flats to extend their lease or purchase their freehold
• Increasing the statutory lease extension term from 90 years to 990 years;
• Banning the creation of new leasehold houses and to consult on capping existing ground rents.
• Subject to the consultation, a cap is likely to be introduced through this new Bill.

While all of this is welcome news, there is no mention currently of abolishing the ‘marriage value’ – that is, the increase in property value once the lease is extended additional premium that is used in the calculation where the lease has less than 80 years left to run, and which can significantly increase the sum payable to the landlord for a lease extension.

It is however positive that the 2 year ownership rule looks set to be abolished before a lease extension can take place.

The most important question in all of this is when will this Bill turn into an Act of Parliament and become law?

Carl Fletcher and the team do hope that this will soon be the case, as it will go some way to solving the great debate between Freehold and Leasehold and the many leaseholders who are suffering at the hands of unscrupulous Landlords