On 7th November 2023 in the King’s speech the Government confirmed that it would bring forward legislation to make it cheaper and easier for leaseholders of flats and houses in England and Wales to extend their lease or buy their freehold.
But what does that really mean?
Whilst the Briefing Note which accompanied the speech contained little detail, it is likely that the following changes will be introduced in the draft Bill:
- Increasing the length of the new lease to 990 years
- Reducing the ground rent payable for lease extensions for houses and flats to nil
- Removing the 2 year ownership requirement for lease extensions
- Allowing leaseholders in blocks which contain up to 50% commercial space to collectively buy their freehold
- Introducing an online calculator to be used to ascertain the purchase price for extended leases and freehold purchases
- Removing the requirement for leaseholders to pay marriage value where their leases have less than 80 years left to run
What else is planned?
The Government is also intending to make the following changes to improve consumer rights:
- Setting a maximum time limit and fee for the provision of the “Sales Pack” which is required when selling a leasehold property
- Requiring transparency in the provision of service charge information so that leaseholders can scrutinise and challenge their service charges more easily
- Replacing buildings insurance commissions paid to landlords and managing agents with transparent admin charges
- Requiring more landlords to join redress schemes so that more leaseholders can access dispute resolution processes
- Scrapping the presumption that leaseholders should pay their landlord’s legal costs when challenging poor practice
- Extending the service charge challenge regime to owners of houses on private residential estates
- Extending the measures brought in by the building safety legislation to provide further protections for leaseholders and to ensure that freeholders and developers are unable to escape their liabilities for building remediation works
- Banning the creation of new leasehold houses
The Government is also consulting on capping all current ground rents.
It is hoped that the draft Bill will be presented to parliament before Christmas. Will this be the long awaited gift that leaseholders have been hoping for?