Boodle Hatfield Property Insights, Dec 2023 - Flipbook - Page 1
Boodle Hat昀椀eld
Property Insights
Dec 2023
their buildings. Whilst not anticipated to form part of
the current reforms, this had been mooted previously
and is a signi昀椀cant change and will increase the
number of properties that may be enfranchised and
looks set to prove contentious amongst landlords.
King’s speech outlines further
plans for leasehold reform
Leasehold reform has been on the political agenda for
several years and there was therefore considerable
speculation as to what the King’s Speech earlier in
November would bring, particularly in the areas of
enfranchisement and residential development.
Leasehold and Freehold Reform Bill
Whilst the King’s Speech itself was perhaps light in detail,
we do now have a little more clarity, with key reforms
to be set out in a Leasehold and Freehold Reform Bill
promising ‘decisive action’ to ‘address one of the longestterm challenges that the country faces: fairness in the
housing market’ ‘making it cheaper and easier for more
leaseholders to extend their lease, buy their freehold, and
take over management of their building.’ The headline
reforms include:
•
Making it cheaper and easier for existing
leaseholders in houses and 昀氀ats to extend their
lease or buy their freehold.
•
Increasing the standard lease extension term from
90 years to 990 years for both houses and 昀氀ats,
with ground rent reduced to £0 and removing the
requirement for a new leaseholder to have owned
their house or 昀氀at for two years before they can
bene昀椀t from these changes. Both of these points
had already been mooted and are not particularly
controversial given the current ability to make back
to back 90 year extension claims and the ability to
assign the bene昀椀t of an extended lease claim. Whilst
the reference to the reduction of ground rent may
look generous those in the know will appreciate that
simply re昀氀ects the current position.
•
Increasing the 25% ‘non-residential’ limit preventing
leaseholders in buildings with a mixture of homes
and other uses such as shop and of昀椀ces, from
buying their freehold or taking over management of
•
Banning the creation of new leasehold houses. The
inference being that this provision will apply only
to newly built houses, rather than all new leases
of houses, but this is not expressly spelt out. The
ban will not extend to new 昀氀at leases, which whilst
attracting a surprising high level of support in some
quarters was surely never going to form part of
the reforms, given the lack of any viable alternative
form of tenure to leasehold for 昀氀at ownership.
Commonhold seemingly on the back burner for the
time being.
Further details of the proposed reforms are set out
in the 150-page Leasehold and Freehold Reform Bill,
published this week. The Bill will need to progress
through Parliament before coming law. Whilst those in
government have stated a clear intention to see the Bill
pass into law before the next general election, this will
require signi昀椀cant engagement from all involved.
Consultation on capping ground rent in existing
leases
The King’s Speech also included the promise of a
consultation on capping existing ground rents to
ensure that all leaseholders are protected from making
payments that require no service or bene昀椀t in return.
Whilst not forming part of the Leasehold and Freehold
Reform Bill, the promised consultation was published
within days of the King’s Speech with the consultation
closing on 21 December.
The consultation sets out a series of options as to how
the government could intervene to cap the ground rent
existing leaseholders pay. This builds on the existing
legislation that already restricts all new residential leases
to a peppercorn ground rent.