Leasehold and Commonhold Reform - Housing Minister's latest statement - 21 November 2024

Mr Pennycook emphasised the need bring the ‘feudal’ leasehold system to an end citing concerns that millions of leaseholders are currently suffering as a result of unfair and unreasonable practices.

What changes will be implemented and when?

There is growing demand for the government to take action on these issues as the reforms are set to hand leaseholders greater rights, protections and control over their homes.

In January, the government will implement some provisions from the Leasehold and Freehold Reform Act, granting leaseholders greater rights and security. Key changes include the removal of the current 'two-year rule,' allowing leaseholders of flats and houses to extend their lease or purchase their freehold immediately after buying the property, rather than having to wait two years.

In the Spring, a new set of reforms will be rolled out to improve access to the 'Right to Manage.' These changes will make it easier for more homeowners in mixed-use buildings to take control of management from their freeholders. Additionally, leaseholders seeking to exercise this right will no longer be required to cover the freeholder’s costs in most cases.

Leaseholders will be better protected against excessive fees from managing agents through strengthened regulations aimed at improving service standards and ensuring value for money. At a minimum, this will include a mandatory professional qualification and a new baseline standard for managing agents, with the government planning a consultation on these measures next year.

In addition, further consultations will be held next year to determine the best approach to banning new leasehold flats, ensuring it works effectively alongside a comprehensive ban on leasehold houses. They also intend to consult on measures to make it easier to challenge unfair service charges, set clearer valuation rates for enfranchisement premiums, and introduce new consumer protections. These will give those paying freehold estate charges greater transparency on what they are paying for, along with the right to challenge costs at the First Tier Tribunal.

The government clearly has significant work ahead, with growing pressure to act swiftly and effectively. However, aside from the limited changes proposed to take place in January and Spring it remains uncertain how far the proposed reforms will go and how quickly these changes will be implemented.

For further information and to speak to a member of our Leasehold team, please contact us on 020 8290 0440.