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Leasehold & Freehold Reform Bill introduced to Parliament

Millions of homeowners in England and Wales will be given greater rights, powers, and protections over their homes as part of the most significant reforms to the leasehold system for a generation.

Governments and policymakers are recognizing the need for reforms to address issues related to property ownership, lease terms, and the overall functioning of the UK housing market. In this blog post, we will explore the key leasehold and freehold reforms that are shaping the UK housing landscape.

Leasehold Reforms

Ground Rent Reform: Recent reforms have focused on addressing the contentious issue of ground rents.  The Government is already consulting on options to cap ground rents for existing leases that will protect leaseholders from facing unregulated ground rents for no service in return. The consultation closes on 21st December and the Government will respond shortly afterwards.

Lease Extension and Enfranchisement: Changes in the lease extension and enfranchisement process are being implemented to make it more accessible and affordable for leaseholders. This includes simplifying procedures, capping costs, and potentially introducing a commonhold system as an alternative to leasehold.

Commonhold: Commonhold is emerging as an alternative to traditional leasehold arrangements. It involves the collective ownership of a building or development, allowing unit owners to have a direct stake in the freehold. The government is exploring ways to promote the adoption of commonhold and make it a more viable option for property owners.

Freehold Reforms:

Freehold Management Companies: Reforms are being considered to enhance the transparency and accountability of freehold management companies. This includes measures to ensure that homeowners are adequately informed about their rights and obligations and have a say in the management of common areas.

Leasehold to Freehold Conversion: Some initiatives are exploring the possibility of allowing leaseholders to convert their property to freehold more easily. This could involve streamlining the conversion process and removing obstacles that may deter leaseholders from pursuing freehold ownership.

The Bill brought to Parliament this week forms part of the Government’s long-term plan for housing and delivers the Government’s manifesto commitments on leasehold reform. As announced in the King’s Speech, the Government will introduce some measures at first reading and others as amendments as the Bill makes its way through Parliament to deliver on the full range of commitments set out above.

The evolving landscape of leasehold and freehold reforms presents both challenges and opportunities for homeowners and the housing industry. Staying informed about these changes, understanding their implications, and seeking professional advice will be key to navigating the shifting dynamics of property ownership. As reforms continue to unfold, it is essential for stakeholders to adapt and make informed decisions that align with their long-term housing goals. If you are contemplating selling your home and you have questions on the current setup of your Leasehold or freehold entity then do feel free to reach out to us to discuss the best way forward.

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