Reforms designed to rebalance landlord-tenant relations may instead penalise leaseholders themselves. In this week's NLJ, Mike Somekh of The Freehold Collective warns that the Leasehold and Freehold Reform Act 2024 risks creating an ‘underclass’ of resident-controlled freehold companies
Measures such as abolishing ‘marriage value’ and capping ground rents could strip away key income streams and undermine financial assumptions underpinning past enfranchisements. The result is a transfer of value to non-participating leaseholders who ‘stand to benefit… without having contributed’.
The reforms also centralise valuation powers with government, raising concerns about political influence over ‘billions of pounds of wealth transfer’. What was framed as fairness may, he argues, destabilise confidence in the system.
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