A new Bill containing further reforms to the leasehold system for properties in England and Wales could be introduced by the end of this year.
In a House of Lords debate last week (2 May 2023), Levelling Up Minister Baroness Scott of Bybrook said that the new Leasehold Bill will be introduced in the “next session of parliament”. Parliamentary sessions generally run from spring to spring, although the current parliamentary session has been extended to autumn 2023. This means that leasehold reform is expected in the 2023–24 parliamentary session, which is due to start this autumn.
The new legislation has been described by Baroness Scott as “very complex” and is not expected to be available for pre-legislative scrutiny.
The Leasehold Bill is the second in two parts of leasehold reform that the Government first announced back in 2021. The first part of the overhaul of legislation was the introduction of the Leasehold Reform (Ground Rent) Act, which came into force last June. This ended ground rents for new, qualifying long residential leasehold properties in England and Wales.
The forthcoming Bill is expected to deal with enfranchisement, which is the process of acquiring the freehold or extending the lease of a property. The Government hopes to make the enfranchisement process more straightforward and cheaper by introducing several reforms, including abolishing the marriage value, capping the treatment of ground rents, and prescribing rates for the calculations at market value. An online calculator will also be introduced to make it simpler for leaseholders to determine how much it will cost them to enfranchise.
To find out more about the expected reforms to leasehold enfranchisement, you can read our previous blog by clicking here.
While welcomed by many, there is some concern that the Government’s reforms will not go far enough.
During last week’s debate, Lord Kennedy of Southwark asked about the Building Safety Act and leaseholder protections. Lease extensions granted in blocks of flats after 14 February 2022 are not protected by the Building Safety Act.
Baroness Scott said that the Government was looking to resolve this issue through legislation but advised leaseholders seeking to extend or vary a lease to seek legal advice and “to come to agreements with landlords to apply the same protections as contractual terms”.
Baroness Thornhill asked if the Government’s reforms would address the “long, off-putting, expensive, complex process” of going to the first-tier tribunal as the final arbiter of leasehold disputes.
Baroness Scott said that the Government would look at the tribunal issue when the leaseholders and private renters reform bills arrive.
The Law Commission also wants the Government to introduce additional reforms that will make commonhold a preferred alternative to leasehold ownership. Commonhold was introduced in 2002 as a way of enabling the freehold ownership of flats and avoiding the shortcomings of leasehold ownership but it has failed to take off.
You can read more about the Law Commission’s report on commonhold on its website by clicking here.
Enfranchisement Solicitors Portsmouth and Waterlooville
If you have a question about the new leasehold reforms or are a leasehold owner and want to know more about the enfranchisement process, please get in touch with Larcomes today.
Our Landlord and Tenant solicitors are specialists in leasehold enfranchisement and can help you determine your eligibility and guide you through the complex statutory provisions. To speak with one of our specialist landlord and tenant team, please call 023 9244 8100 or make an online enquiry.
Please note that this article is not intended as legal or professional advice. It is for general guidance only, and updates to the law may have changed since it was published.