Yesterday the UK Government indicated its priorities for the Leasehold reform, that has been long awaited, in state Opening of Parliament. Back in June of this year, Roe & Co Residential Sales & Lettings, out of pure frustration, wrote to Mr Michael Gove himself. Outlining the issues with Leasehold properties that have become increasingly worse over the years. From local freeholders selling to large companies, where they hold homeowners to ransom, when it comes to making changes to their homes or wanting to buy their freehold and charging extortionate prices. To not only having one freeholder on your title, to sometimes under leases and not just one but maybe two. |
 This was the response we received. |
Dear Kate Roe,
Department for Levelling Up, Housing and Communities
2 Marsham Street
London
SW1P 4DF
Our Ref:2*4*64*6
Date:12 June 2023
Thank you for writing to the Rt Hon Michael Gove MP on 15 May regarding leasehold reform and the reform of the home buying and selling process. I have been asked to reply.
First, I was sorry to read about the situation regarding your client and their property in Bolton. I can understand that it must be frustrating for your client to not have an engaged freeholder.
I would like to assure you that the government is committed to creating a housing system that works for everyone. We are taking a number of steps to achieve this, in order to offer people real control over their homes and their lives.
In particular your letter highlighted the costs of a lease extension. It is our intention empower leaseholders by making it easier and cheaper to take over the management of their building or to buy their freehold or extend their lease, with significant discounts for those trapped with onerous ground rents. Our reforms to enfranchisement valuation also make sure that sufficient compensation is paid to landlords to reflect their legitimate property interests.
For new homes, we have already introduced the Leasehold Reform (Ground Rent) Act 2022 which limits ground rents to a peppercorn in most new homes and restricts them where existing leases are extended. But we want to go further, by extending the benefits of freehold ownership to buyers of new homes from the outset. To achieve this, we will end the sale of new residential long leases on houses, other than in exceptional circumstances, and reform the commonhold legal system for flats.
We are due to bring forward further leasehold reforms later in this Parliament and details will be published in due course.
Your client may benefit from knowing that free information and advice is funded by the Department and provided by The Leasehold Advisory Service (‘LEASE’). LEASE offers a comprehensive range of online resources, as well as a telephone and email enquiry service. LEASE can be contacted through their website www.lease- advice.org, via telephone (020 7832 2500) or by email (info@lease-advice.org).
Whilst this was again frustrating as there was no clear end in sight. Yesterdays news was music to our ears. And finally, it feels like the shackles are being released.
Propertymark have commented
An introduction of a Bill will make it cheaper and easier for leaseholders in houses and flats to buy their freehold –- so that leaseholders pay less to gain security over the future of their home.
It will increase the standard lease extension term from 90 years to 990 years for both houses and flats, with ground rent reduced to £0 ensuring leaseholders can enjoy secure, ground rent-free ownership without the hassle and expense of future lease extensions.
The removal of the requirement for a new leaseholder to have owned their house or flat for two years before they can benefit from these changes will be included.
Increasing the 25% ‘non-residential’ limit preventing leaseholders in buildings with a mixture of homes and other uses such as shops and offices, from buying their freehold or taking over management of their buildings – to allow leaseholders in buildings with up to 50% non-residential floorspace to buy their freehold or take over its management.
Other consumer rights and protections in the Bill include:
- Setting a maximum time and fee for the provision of information required to make a sale to a leaseholder by their freeholder
- Requiring transparency over service charges
- Removing building insurance commissions for managing agents
- Extending redress schemes for leaseholders to challenge poor practice
Building on measures in the Building Safety Act 2022 to ensure freeholders and developers can’t escape liability for remediation work.
We have communicated details relating to the next stages of the Bill and the UK Government, has confirmed an initial commitment of £1.2M to begin designing a new digital system for possessions.
Following the second reading, is the committee stage and the first sitting of the Public Bill Committee is expected to be on Tuesday 14th November, where they will scrutinise it line by line & the committee is scheduled to report by Tuesday 5th December.
