21 November 2024
Chairman Bob Smytherman has received a communication from Matt Prior at Commonhold Policy at MHCLG
OFFICIAL
Dear Bob
I hope you are well.
Today the Government made a statement on the next steps for leasehold and commonhold reform. The Housing Minister’s written statement can be found here: Written statements – Written questions, answers and statements – UK Parliament.
The statement sets out the steps the government intends to take to implement the reforms to the leasehold system, contained in the Leasehold and Freehold Reform Act 2024; and to progress a wider set of reforms to the leasehold and commonhold system over the course of this Parliament. The government will continue to work with delivery partners and stakeholders as we implement the Act and look to future reform.
The Leasehold and Freehold Reform Act 2024
The statement reaffirms the government’s commitment to enact the Leasehold and Freehold Reform Act 2024, but there are some serious flaws in the Act which need to be rectified via primary legislation before some of the measures can come into effect, including those on the amended valuation process. The Government will address these issues as soon as Parliamentary time allows.
The statement sets out how and when we will implement parts of the rest of the Act, much of which requires an extensive programme of consultation and secondary legislation to turn on, ensuring it works effectively:
- In January next year, we will commence the removal of the two-year restriction on enfranchisement and lease extension claims from the point of property purchase so that leaseholders will no longer have to wait.
- In Spring 2025, we will commence the provisions on the Right to Manage which increase access to the right for leaseholders in mixed-use buildings, alongside reforming costs and voting rights.
- The government will consult very shortly on the detail of the Act’s ban on buildings insurance remuneration.
- Next summer, we will consult on the valuation rates used to calculate the cost of enfranchisement premiums. Parliament will then need to approve the secondary legislation that sets out the detail, as well as fixing the Act’s serious flaws in further primary legislation, before implementing the package.
- Next year, we will consult on implementing the Leasehold and Freehold Reform Act’s new consumer protection provisions for homeowners on freehold estates; and on service charges and legal costs and bring these measures into force as quickly as possible thereafter.
Further reform of the leasehold and commonhold system
The statement also sets out further ambitious reform of the leasehold and commonhold system over the course of this Parliament. The statement includes commitments to:
- Publish a draft Leasehold and Commonhold Reform Bill in the second half of next year with a central focus on commonhold. As part of draft legislation, we will consider other vital reforms to the existing leasehold system.
- The government remains committed to its manifesto commitment to tackle unregulated and unaffordable ground rents and we will deliver this in legislation.
- Remove the disproportionate and draconian threat of forfeiture as a means of ensuring compliance with a lease agreement.
- Consult next year onnew reforms to the section 20 ‘major works’ procedure.
- Start preparing the transition away from leasehold by publishing a White Paper on reforms to commonhold early next year; and consult on the best approach to banning new leasehold flats so this can work effectively alongside a robust ban on new leasehold houses, seeking input from industry and consumers.
- Look again at Lord Best’s 2019 report on regulating the property agent sector, particularly in light of the recommendations in the final Grenfell Inquiry report. We will strengthen regulation of managing agents to drive up the standard of their service, including as a minimum, mandatory professional qualifications, and will consult on this matter next year.
- Consult next year on options to reduce the prevalence of private estate management arrangements to end the injustice of ‘fleecehold’.
Thank you once again for your continued engagement, as we address fixing the leasehold and commonhold system, and the issues faced by homeowners on freehold estates.
As ever, please do get in touch to discuss further if you wish, and if you have any questions.
Matt Prior
Commonhold Policy
MHCLG