Setting out the government’s legislative priorities for the next 12 months, King Charles announced a Leasehold and Freehold Bill to ban the creation of new leasehold houses and make it cheaper and easier for more leaseholders to: extend their lease, with a standard term of 990 years and zero ground rent for both houses and flats; buy their freehold; and take over management of their building. The rights will apply to leaseholders in buildings with up to 50% non-residential floorspace (such as flats above shops) and leaseholders will no longer have to wait two years before applying.
A Renters (Reform) Bill will also be introduced, abolishing ‘no-fault evictions’, adding mandatory grounds for possession including that the landlord wishes to sell the property or move a family member in, and providing for eviction within two weeks for a breach of the tenancy agreement or damage to the property. The Bill provides for a Private Rented Sector Ombudsman with binding powers to resolve tenancy disputes.
However, Jeremy Raj, head of residential property at Irwin Mitchell, said none of the proposals ‘deal with the fundamental issues troubling the housing market, such as lack of supply, uncertainty regarding future regulation, unsuitable stock for our environmental ambitions and our population profile, and of course the affordability crisis’. Moreover, Raj said the leasehold bill ‘disappoints those of us who have been hoping for many years now for a co-ordinated and fundamental overhaul of the areas that have let leasehold down as a system of tenure’.
Mark Chick, director of the Association of Leasehold Enfranchisement Practitioners and partner at Bishop & Sewell, said the leasehold bill could be good news or ‘could fuel confusion, cost and controversy’.
Chick said extending leases to 990 years was an ‘easy win’, and highlighted his view that removing leasehold for new flats isn’t possible ‘until the work necessary to make the existing system of commonhold fit for purpose is complete’.
