What it means for homeowners
On November 27th, 2023, the Leasehold and Freehold Reform Bill was introduced to Parliament, marking a historic shift in the housing market towards fairness and homeowner empowerment.
This Bill is a cornerstone of the Government's Long-Term Plan for Housing and aims to transform the leasehold system, which has long needed reform. For millions of homeowners in England and Wales, this Bill promises enhanced rights, powers, and protections, fundamentally altering their relationship with their homes.
Housing Secretary Michael Gove said: “People work hard to own a home. But for far too long too many have been denied the full benefits of ownership through the unfair and outdated leasehold system. That’s why liberating leaseholders forms a vital part of the Government’s Long-Term Plan for Housing. So today marks a landmark moment for millions of leaseholders across the country, as we unveil laws to deliver significant new rights and protections, slash unfair costs and crack down on exploitation.”
The key points of the Bill are manifold. Firstly, it simplifies and reduces the costs for leaseholders to buy their freeholds. The standard lease extension term will jump to an impressive 990 years for both houses and flats. This extension is a game-changer, offering long-term security and reducing the hassle and expense of future extensions.
Transparency is always vital
Moreover, the Bill introduces more transparency in service charges. Homeowners will now receive their bills in a standardised format, making it easier to understand and challenge any questionable charges. Additionally, leaseholders will find it simpler and more affordable to take over the management of their property, allowing them greater control over their living spaces.
The Bill also plans to rebalance the legal costs regime. It will eliminate the current presumption that leaseholders should bear their freeholders’ legal costs in disputes over service charges. This change is poised to encourage more leaseholders to challenge unreasonable charges without fear of prohibitive costs.
More support for homeowners is always welcome
Homeowners will also benefit from expanded access to redress schemes, ensuring they have avenues to challenge poor practices. This reform extends to freeholders who manage their buildings directly, requiring them to join a redress scheme and granting leaseholders the right to challenge them.
The Bill goes a step further in addressing the nuances of mixed-use buildings. It raises the commercial floor space limit to 50%, enabling more leaseholders in these buildings to manage their property or buy its freehold. Freehold homeowners on private and mixed tenure estates aren't left out either; they'll receive comparable rights to transparency and redress as leaseholders.
Furthermore, the Bill proposes banning the sale of new leasehold houses, except in exceptional cases. This move will ensure that, generally, new houses in England and Wales will be freehold from the outset. It also scraps the requirement for leaseholders to have owned their property for two years before extending their lease or purchasing their freehold.
For those of us in the real estate industry, and for homeowners alike, these developments are not significant, and worth fully understanding. If you require any assistance in this matter, we are here to assist you as best we can.
We are here to help you move in and around Wynyard
If you are looking for help with any matter of the Wynyard property market, it is best to speak to property professionals. No one knows for sure what is going to happen next, so we won’t claim to have all the answers, but the Anthony Jones team is keen to help you as best we can. If you would like to contact us over housing matters, please call us today on 01740 807107.
