Leasehold and Freehold Reform Bill introduced to the House of Commons: Key Takeaways

The Leasehold and Freehold Reform Bill was introduced to the House of Commons and was given its First Reading on Monday 27 November 2023.

The takeaways from the draft bill for enfranchisement and lease extension claims under the Leasehold Reform 1967 and Leasehold Reform, Housing and Urban Development 1993 Act’s are: –

• Removal of ‘marriage value’ from the calculation of the premium cost
• The introduction of a compulsory standard valuation method for lease extensions where the valuation assumes the freeholder is a “willing seller”
• An increase in the lease extension term to 990-years (up from 90 years for flats, and 50 years for houses).
• The removal of the requirement for a new leaseholder to have owned their house or Flat for two years before they can extend.
• An increase in the ‘non-residential’ limit preventing leaseholders from buying their freehold or taking over management of their buildings from 25% to 50% (RTM)
• Leasehold tenure for flats will continue.

What should leaseholders do?

The pending reforms do create considerable market uncertainty on the value of freehold reversionary interests. For leaseholders who are not desperately seeking to extend their leases or to enfranchise in the next 18 months, a voluntary approach to the landlord could yield a surprising premium offer.

You can browse through the services we provide for flat owners and freeholders and contact us by calling on 020 7940 4060 or emailing us at mail@anthonygold.co.uk.