With the summer upon us now is a good time to reflect on the King’s Speech and what this might mean for residential leasehold.
The Government used the King’s Speech on 17 July to announce new legislation that will ban the sale of leasehold flats and establish commonhold as the default form of tenure writes Mark Chick, Senior Partner and leasehold law expert.
A ban on the sale of new leasehold flats?
As well as promising swift action to implement the provisions of the Leasehold and Freehold Reform Act 2024, the new Labour Government has also said it will look to introduce a Leasehold and Commonhold Reform Bill, which will introduce further reforms including a ban on the sale of new leasehold flats.
The Government also promised to enact the remaining recommendations in the Law Commission’s reports from July 2020. This includes reforms to commonhold, enfranchisement, lease extensions and Right to Manage legislation. The King’s Speech also stated that Labour intends to regulate existing ground rents and end the ‘injustices of forfeiture’.
“It is clear from Labour’s manifesto and the subsequent King’s Speech that the new Government intends to pursue a far more radical leasehold reform agenda, with the ultimate goal of replacing leasehold with a reinvigorated form of commonhold ownership.
“I expect that the immediate priority for the new Government will be to draft the secondary legislation necessary to enact the remaining provisions of the Leasehold and Freehold Reform Act. Given the rush to get this legislation through the last Parliament ahead of the General Election, there is a considerable amount of work still required to enable certain key provisions to be introduced, not least around valuation and the abolition of marriage value.
Making Commonhold fit for purpose
“If the Government is to enact all the recommendations of the Law Commission reports within this Parliament, then a lot of work will need to be done to make commonhold fit for purpose. Meanwhile, the abolition of leasehold as a land tenure for residential flats will be extremely complex, requiring significant tracts of parliamentary time, and the courts will also need the opportunity to prepare for new legislation, as will leaseholders, freeholders and their agents.
“Freeholders, leaseholds and other stakeholders in the residential property sector will be keen to see how the proposed leasehold and commonhold reform bill will shapeup. Leasehold reform is incredibly complex, and the devil will be in the detail of any new draft legislation.
However, what is already clear is that there are plans afoot to make significant changes to residential leasehold ownership – and we await clarity as to what form these will take along with the fuller implementation of the Leasehold and Freehold Reform Act 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 09 August 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.
