The Government said it would act quickly to enact leasehold reforms, however the first 100 days plus of this parliament have not seen any immediate action in this area, the Government having been busy with other things, such as the Renter’s Rights Act and other elements of the King’s Speech. That said, rumours abound that we may hear something later this week.
As recently as September, Matthew Pennycook was doing the media rounds explaining that the Government would ‘act quickly’ to bring forward its plans for leasehold reform and deliver on the promise to give leaseholders greater rights, powers and protections.
However, the Minister of State for Housing has since rowed back on the timescales involved, saying in an interview with LBC Radio on 9 November that leasehold reform represents a “whole of Parliament” commitment, meaning leaseholders could be waiting until 2029 before they see the benefits of the promised reforms. We do know that leasehold is complicated, and to some extent a degree of ‘expectation management’ and honesty about the likely timescales is to be appreciated – although this will not be welcome to those campaigning for immediate change.
Labour has said it would “ban new leasehold flats and ensure commonhold is the default tenure,” and in the King’s Speech committed to regulate ground rents and to “act quickly” to implement reforms.
The Government has also said that it would look to bring forward all of the recommendations made by the Law Commission – which is no mean feat and not something which can be implemented overnight. We also have the promise of a Commonhold and Freehold Reform Bill. This would be a larger piece of legislation and one which would seek to make wider amendments to the current leasehold and enfranchisement system, implementing more of the Law Commission’s recommendations from their 2020 report following their in depth consultation into this area. We should not under estimate the amount of parliamentary time that will be required to deal with this properly and it will be an ambitious legislative promise, one that may well take until the end of this parliament to move to fruition.
Reform has been on the agenda since late 2017, when Sajid Javid was Housing Minister, and the pace of change may seem to be ‘glacially slow’ to some. We do have to reflect on the Leasehold Reform (Ground Rent) Act 2022, and the passage of the Leasehold and Freehold Reform Act 2024 (‘LFRA’). However, there is more to be done to implement the provisions of LFRA and, as mentioned elsewhere, the prospect of Human Rights Act challenges may slow matters down. The secondary legislation required to bring in the majority of the provisions will have to contend with some of the most complex aspects of enfranchisement, including valuation reform, where the capitalisation and deferment rates still need to be set, so it is right that the government takes time and gets the detail right, particularly given the haste with which the Act was prepared.
So perhaps the key question is, does the new Labour Government see the Leasehold and Freehold Reform Act as a workable piece of legislation, or will it come to view it as more of a hindrance than a help? After all, the Act was rushed through in the ‘wash up’ and Labour may feel its hands have been unhelpfully tied. If so, we could see a situation where the Government scraps the Act altogether and proceeds with preparing its own piece of consolidating legislation, which could better achieve its aims to reinvigorate commonhold, abolish ground rents and enact sweeping valuation reform.
Only time will tell, but the clock is ticking. Aspects of the LFRA are already being tested by freeholders in the Courts, and the Government will want to consult widely to head off the potential for sizeable compensation claims. All this will take time amid a packed legislative agenda.
The genie of leasehold reform is well and truly out of the bottle, but the complexity of the task ahead means the Government may need more than three magic wishes to get the job done.
18.11.24
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 20 November 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.
