Leasehold and Commonhold Reform statement released 21 November 2024
Leasehold and Commonhold Reform statement released 21 November 2024
Matthew Pennycock, the Minister of State for Housing and Planning issued a statement on 21 November 2024 providing a welcome update on the future of leasehold reform.
The statement can be read in full here -Written statements - Written questions, answers and statements - UK Parliament
There are a number of important issues addressed in the statement such as:
Reaffirming the Labour Government’s pledge to “bring the feudal leasehold system to an end”
Recognising that LAFRA 2024 (The Leasehold and Freehold Reform Act 2024) has made the enfranchisement and RTM process “more challenging” as opposed to easier and cheaper. The statement also confirms that there are a number of “specific but serious flaws” in LAFRA which have significant and unintended consequences, which Labour intend to remedy through primary and secondary legislation
The requirement for the tenant to own a property for 2 years prior to extending their lease is to be removed in January 2025
Amendments to RTM provisions are expected in Spring 2025
A draft Leasehold and Commonhold Reform Bill is to be published in the second half of 2025 which will “take decisive first steps to making commonhold the default tenure by the end of the parliament”
Tackling unaffordable ground rent
Removing “draconian” forfeiture provisions
Reforms to the section 20 major works procedure
Strengthening the regulation of managing agents and introducing mandatory professional qualifications
A number of consultations are also set to take place in 2025 in relation to the following:
LAFRA’s ban on building insurance commissions being charged to the leaseholders via service charges (expected in 2025)
LAFRA provisions on service charge and legal costs (some time in 2025)
Valuation rates used to calculate lease extension and enfranchisement premiums, thereafter Parliament will deal with the required secondary legislation (the consultation is expected in Summer 2025)
LAFRA’s consumer protection provisions
Reinvigorating Commonhold
The statement also makes clear that the Labour Government will be taking a cautious approach to introducing further leasehold reform and it may be some time before any further legislation is introduced.
