Last week marked the King’s first opening of Parliament. In his speech he set out the proposed contents of the Leasehold and Freehold Reform Bill.
The Leasehold and Freehold Reform Bill is part of a series of legislative measures to reform the leasehold and commonhold sector. This began last year with the Leasehold Reform (Ground Rents) Act 2022. This act prohibited the payment of ground rent for new leases, which we covered in more detail here.
The Leasehold and Freehold Reform Bill is intended to make the following changes:
However, it is notable that although there is a commitment to make it cheaper to extend leases, there is no specific commitment to abolish marriage value when calculating the premium payable for lease extensions. Although recommended by the Law Commission in their 2020 report, and announced by the Secretary of State in 2021, there was intense lobbying to not include this as part of the current reforms to leasehold law. It would appear that this lobbying has been successful.
Other proposed changes to the leasehold sector include:
Despite the wide reaching proposals, there is a very real risk that this legislation will fail to pass through parliament before the end of this government’s term. With an election required by January 2025 at the latest, the above proposals may remain as proposals, and not translate into actual legislation.
Pinney Talfourd are experts in commercial and residential property litigation and can advise you on changes to the law so you are given up to date advice.
Please do not hesitate to contact either Oliver-James Topping on 01708 463227 should you wish to discuss anything further.
The above is meant to be only advice and is correct as of the time of posting. This article was written by Oliver-James Topping, Associate in the Residential Property Litigation Team at Pinney Talfourd LLP Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as of November 2023.