Reforms to hand leaseholders greater rights, protections and
control over their homes will be brought forward next year
alongside plans to bring the feudal leasehold system to an end,
the government has announced today (21 November).
Measures in the Leasehold and Freehold Reform Act will be
implemented at pace in the new year to allow more leaseholders to
buy their freehold or extend their lease without having to wait
two years from the point they purchased their property. It will
also allow homeowners to take over the management of their
building, and ensure they have more transparency of costs and can
challenge unfair service charges, along with other changes to
bolster homeownership.
The government will also introduce its new draft Leasehold and
Commonhold Reform Bill in the second half of 2025, a crucial step
towards the next generation of homeowners benefitting from a more
modern, functional and fit-for-purpose commonhold system.
Further reforms will be made to tackle unregulated and
unaffordable ground rents, end the injustice of ‘fleecehold'
where homeowners on freehold estates pay fees and remove the
draconian threat of forfeiture. These changes, together with
strengthened regulation of managing agents, will ensure existing
leaseholders are better protected.
Housing Minister
said:
“Millions of homeowners across the country will remember with
fondness the sense of satisfaction, pride and security they felt
when purchasing their own home. Yet, for far too many
leaseholders, the reality of home ownership has fallen woefully
short of the dream.
“The government is determined to honour the commitments made in
our manifesto, and I am pleased today to set out the steps we
will take to provide relief to those currently subject to unfair
and unreasonable practices and to progress the wider set of
reforms necessary to end the feudal leasehold system for
good.”
The existing commonhold framework requires modernising to ensure
it works for all flats in the future, and the government will
take steps to make it the default tenure - starting with
publishing a Commonhold White Paper in the new year, followed by
a consultation on the best approach to banning new leasehold
flats.
In January, the government will bring forward more Leasehold and
Freehold Reform Act provisions to give leaseholders more rights
and security through removing the current ‘two-year-rule' so
leaseholders no longer have to wait two years after the point of
purchase before exercising their right to extend their lease or
buy their freehold.
In the Spring, a package of measures will be introduced to expand
access and reform the cost rules and voting rights where
leaseholders claim the ‘Right to Manage' meaning more homeowners
in mixed-use buildings can take over management from their
freeholders - and leaseholders making claims will no longer have
to pay their freeholder's costs in most cases.
Those who achieve the dream of homeownership will also be
protected from unscrupulous managing agents through strengthened
regulation to drive up the standard of service and ensure value
for money. As a minimum this will include a mandatory
professional qualification and a new basic standard for managing
agents, and the government will consult on this next
year.
Further consultations will take place next year on making it
easier to challenge unreasonable service charge costs, setting
valuation rates used to calculate the cost of enfranchisement
premiums, and implementing new consumer protection provisions so
those who pay freehold estate charges have more transparency of
what they are paying for and the right to challenge at the First
Tier Tribunal.
