Mims Davies MP is reflecting on the recent Leasehold Reform Bill Debate in the House of Commons.
"The Leasehold and Freehold Reform Bill was introduced to the House of Commons on 27th November and had its second reading on 11th December. This was announced as coming forward in the King’s Speech.
The Leasehold and Freehold Reform Bill will increase the standard lease extension term from 90 years in flats and 50 years in houses to 990 years for both houses and flats, with ground rent reduced to a peppercorn - zero financial value - upon payment of a premium. This will ensure leaseholders can enjoy secure, ground rent-free ownership of their properties for years to come, without the hassle of repeated lease extensions.
I understand that the Government will remove the requirement for a new leaseholder to have owned their house or flat for two years before they can benefit from these changes.
The Bill will also improve leaseholders’ consumer rights. It will require transparency over service charges using a standardised comparable format so leaseholders can scrutinise and better challenge them if they are unreasonable.
The Government will replace buildings insurance commissions for managing agents, landlords and freeholders with transparent administration fees, stopping leaseholders from being charged exorbitant commissions on top of their premiums. I am told the Government will extend access to redress schemes for leaseholders to challenge poor practice, as well as scrapping the presumption for leaseholders to pay their freeholders’ legal costs when challenging poor practice.
In addition, the Government is consulting on capping ground rents for existing leaseholders to ensure all leaseholders are protected from making payments that require no service or benefit in return. Options under consideration include capping future ground rents at a peppercorn or at a percentage of the property value.
If you would like to share your views, you can do so here: https://www.gov.uk/government/consultations/modern-leasehold-restricting-ground-rent-for-existing-leases
The consultation closes on 17th January and, subject to the outcome of the consultation, the Government will look to introduce a cap through the Leasehold and Freehold Bill. This builds on the Leasehold Reform (Ground Rent) Act 2022 which put an end to ground rents for new, qualifying long residential leasehold properties.
Lastly, I understand that the Government intends to ban the creation of new leasehold houses so that, other than in exceptional circumstances, every new house in England and Wales will be freehold from the outset."
A guide to the Leasehold and Freehold Bill can be found here:
https://www.gov.uk/guidance/guide-to-the-leasehold-and-freehold-reform-bill