Prohibition of New Leasehold Houses

Key Objectives of the Leasehold and Freehold Reform Bill
The much-awaited Leasehold and Freehold Reform Bill was presented to the House of Commons on November 27, 2023, soon after the King's speech. The Bill introduces significant reforms to improve leaseholder rights and create a fairer housing system. One of the primary objectives of the Bill is to prohibit the creation of new leasehold houses in England and Wales, except for leaseholds on flats. This aims to ensure that homeowners can own their properties outright without being tied to leasehold agreements.

Making Lease Extensions and Freehold Purchases Easier

The Bill simplifies and reduces the cost of extending lease terms or acquiring freeholds for leaseholders in both homes and apartments. Key changes include:

• Extending the standard lease extension term from 90 years to 990 years.
• Reducing ground rent to zero for leaseholders extending their leases.
• Removing the requirement for new leaseholders to own their property for two years before benefiting from these reforms.

Enhancing Transparency and Fairness in Leasehold Charges

The Bill seeks to make the leasehold system more transparent by:

• Setting a maximum time frame and fee for freeholders to provide essential information during leasehold property sales.
• Replacing hidden commissions on building insurance with transparent administrative fees.
• Requiring clarity and fairness in servicechargesorted.co.uk/blogs/service-charge-accounts-for-self-managed-small-blocks-of-flats'>service charges for leaseholders.

Strengthening Leaseholder Protections and Rights

To prevent exploitation, the Bill introduces stronger protections, including:

• Expanding access to redress schemes so leaseholders can challenge poor practices.
• Abolishing the presumption that leaseholders must pay their freeholders' legal costs when disputing unfair practices.
• Extending similar rights to leasehold house owners, such as the Right to Manage (RTM) and estate management rights.

Changes to the RTM Floor Space Requirement

A key amendment in the Bill allows leaseholders in buildings with up to 50% non-residential floor space to claim their Right to Manage (RTM) or purchase the freehold. This is an increase from the previous 25% limit, making it easier for leaseholders in mixed-use buildings to gain control over their property.

qual Rights for Freehold Homeowners in Private Estates

The Bill extends redress rights to freehold homeowners on private and mixed-tenure estates, ensuring they have the same rights as leaseholders regarding transparency and estate charges. Additionally, it reinforces the Building Safety Act 2022 to hold freeholders and developers accountable for funding building remediation work.