Leasehold & Freehold Reform Bill (Dec 23 Update)
On Monday, 11th December, the House of Commons held its Second Reading of the Leasehold and Freehold Reform Bill, presenting MPs with their first opportunity to scrutinise and debate the piece of legislation, initially announced in this year’s King’s Speech.
The Bill is the second part of the Government plans to reform English and Welsh property law. It follows on from the Leasehold Reform (Ground Rent) Act 2022, which put an end to ground rents for new, qualifying long residential leasehold properties in England and Wales. The Government says the Bill will make long-term changes to homeownership for millions of leaseholders.
Despite being passed to the Public Committee stage (which was recently announced as ending on Thursday 1st February 2024), and both the Government and Opposition supporting the Bill, there was rigorous debate, more on what was not included, than what was. Great attention was paid to the fact that the Bill in its current form, does not ban leasehold tenure in any capacity, nor does it cover leasehold flats.
Public Consultation
Alongside the Bill, the Government launched a consultation seeking views on options to restrict ground rents for existing leaseholders which can be found here: https://www.gov.uk/government/consultations/modern-leasehold-restricting-ground-rent-for-existing-leases The deadline to respond has been extended to 17 January 2024.
During the debate, Mr Gove was clear that his preferred option was to cap ground rents at a peppercorn, effectively zero, which would align them with new leaseholds established since 30 June 2022. However, any plans would have to be agreed and come into force before any general election take place which, looking at the current possible timeframes, appears unlikely.
Additional information can be found on the Government website here:
https://www.gov.uk/guidance/guide-to-the-leasehold-and-freehold-reform-bill
As always, we continue to follow progress and provide updates. In the meantime, if you have any questions or concerns about your property, please call the Pace team on 01702 445 600.
As always, we will keep you up to date with any important changes as and when they happen. In the meantime, if you have any questions or concerns about your property, please call the Pace team on 01702 445 600..
