With the date for a General Election now set for 4 July 2024, many were left wondering if key reform legislation, in the shape of the Leasehold and Freehold Reform Bill, will be passed before Parliament is dissolved.
However, in a flurry of business before the final session of this parliament, the Leasehold and Freehold Reform Act was passed, despite numerous comments in the Lords relating to the one-sided (i.e. purely pro leaseholder) nature of the reforms.
The government was keen to deliver on its manifesto pledge to enact the ban on leasehold houses and to carry forward the programme of leasehold changes first promised back in 2017.
With both the Government and opposition parties willing to back the overall context of the reforms, the Bill made it onto the statute books, although now subject to ‘electioneering’ we will see what the other parties will say about taking reforms further. Labour has already said that it will go further and take steps to ‘abolish leasehold’ for residential property – though it remains to be seen how this might work in practice.
While there was an expectation that ground rents could be capped either at a peppercorn or £250, as the outcome of the consultation on this had not been announced, we wait to see what a future government may do on this crucial issue. It had been anticipated that perhaps there would be a late amendment either in the Lords or back in the Commons had the bill taken longer to progress.
With at least 5M leasehold dwellings in England, according to data from the Department for Levelling Up, Housing and Communities, the reforms will be welcome news for leaseholders ahead of the key campaigning period running up to the General Election. There will also be promises from other parties about what they will do to carry forward any further reforms – and we will have to wait for the parties’ manifestos before being able to comment further on that.
A key thing to note at this stage is that the Act is not yet in force and therefore none of the changes are effective. There are commencement provisions that will bring in some provisions relating to the Building Safety Act, service charge cost recovery and rent charges, but the mainstay of the Act will need secondary legislation to come into force. This may well take months to develop and in the meantime, we have the election ‘restricted period’ during which time government departments cannot take any active steps that might be seen as ‘campaigning.’ It may therefore be a little while before we know which of the Act’s changes will come in and when this will be.
As ever, watch this space for further developments and news.
26.5.2024
Contact our Landlord & Tenant team
If you have a query concerning leasehold property, then please contact our expert Landlord & Tenant team by emailing leasehold@bishopandsewell.co.uk or call on +44(0)20 7631 4141.
The above is accurate as at 26 May 2024. The information above may be subject to change.
The content of this note should not be considered legal advice and each matter should be considered on a case-by-case basis.
