Revolutionising Homeownership: The Impact of The Leasehold and Freehold Reform Bill

Today, we're going to talk about the Leasehold and Freehold Reform Bill, a milestone in England and Wales' property landscape that you need to know about.

Introduced in late 2023, this Bill, backed by "levelling up secretary," Michael Gove, has been designed to empower leaseholders and bolster their consumer rights.

It's expected to bring long-term changes to homeownership for millions of people in England and Wales.

Now, you might be wondering, what are these changes?

The Bill introduces a series of significant changes that could transform the leaseholder and freeholder landscape:

1. Whether you're looking to extend your lease, or buy the freehold, the Bill has got you covered. It increases the statutory lease extension term to a whooping 990 years. Moreover, it removes the previous requirement of having owned the leasehold property for two years before you can extend your lease or buy the freehold.
2. The Bill brings some good news for those who are part of buildings with mixed uses, including homes and commercial uses like shops or offices. It increases the 25% "non-residential" limit, making it easier for such leaseholders to buy their freehold or manage their buildings.
3. Transparency, as we all know, is key. The Bill introduces increased regulation and transparency concerning service charges, rent charges, administration charges, and estate management.
4. Buying or selling a leasehold property will also become a breeze. The Bill proposes to make this process quicker and easier by setting a maximum time and fee for the provision of management information by the freeholder when a leaseholder is selling their property.
5. Finally, the Bill proposes to remove the presumption for leaseholders to pay the freeholders' legal costs when challenging service charges. Now, the landlord will have to apply to the court or tribunal if they wish to recover litigation costs through the service charge. This builds on the legislation brought forward by the Building Safety act 2022.

These changes, collectively, are bound to have far-reaching implications for leaseholders, freeholders, and the wider property and financial markets. They aim to address long-standing issues in the leasehold process and make the overall experience of homeownership more fair and transparent.

So, whether you're a leaseholder or just someone interested in the property market, stay tuned to our blog as we continue to unravel what this Bill means for the future of homeownership in England and Wales.

The Committee Stage of the Bill was completed at the end of January 2024.

Remember, knowledge is power, and understanding these changes can help you make informed decisions about your property and safeguard your interests.