During the first King's Speech for over 70 years King Charles III made widely anticipated announcements concerning leasehold property and the introduction of a Leasehold and Freehold Reform Bill.
"My Ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackling the exploitation of millions of homeowners through punitive service charges."
The purposes of the bill is to increase the rights of existing leaseholders and to improve leaseholders rights as consumers. A summary of the proposals are:
- Make it cheaper and easier for leaseholders extend their leases, or buy their freehold. This will apply to leaseholders of both flats and houses.
- The statutory lease extension length will be increased from 90 years to 999 years and ground rent will be reduced to £0.
- The requirement within the Leasehold Reform, Housing and Urban Development Act 1993 for a leaseholder to have owned their flat for two years before commencing their claim for a lease extension will be removed.
- Increasing the limit of 25% to 50% for non-residential areas within a building to allow leaseholders to purchase the freehold or take over the management functions of their mixed use building.
- Granting leaseholders greater rights to challenge poor practice from freeholders, obtain transparency over fees charged, insurance commission service charge. There will also be a maximum time frame and set fee for freeholders to obtain information required to sell a leasehold flat.
- Banning, except in exceptional circumstances the sale of new leasehold houses.
It will be interesting to see these measures be introduced and the changes that these will bring to the housing market. There will likely be an increase in the number of lease extensions claim being exercised as the two year qualifying rule will be removed.
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