Leasehold and Freehold Reform Bill – The King’s Speech Update

The Leasehold and Freehold Bill, a notable part of the recent King’s Speech, marks a significant move towards leasehold reform in England and Wales. In notes released following the King’s Speech, the government said the Leasehold and Freehold Reform Bill would empower leaseholders by:

• Proposing a ban on new leasehold houses, ensuring that all new houses will have freehold status from the start.
• Seeking to phase out leaseholds by extending the standard lease term from 90 years to 990 years for both houses and flats and reducing the ground rents to zero.
• Removing the two-year ownership requirement for leaseholders seeking extensions.
• Expanding the current restriction on the 25% ‘non-residential’ limit, which hinders leaseholders in buildings with a mix of residence and commercial units from acquiring their freehold or taking control of building management. The proposal suggests revising the limit to include buildings with up to 50% non-residential units, enabling leaseholders to purchase their freehold or assume managerial responsibilities.

King Charles emphasised the goal of making housing more affordable and streamlined for leaseholders, addressing issues of overcharging through punitive service charge fees.

Also Read: Restricting ground rents for flat owners following the King’s Speech 2023