The leasehold reform bill has been introduced into parliament

The Leasehold and Freehold Reform Bill has been introduced to government which is looking to provide sufficient new protections and rights to homeowners once and for all. 

The bill, which has been branded by the government as one of the ‘most significant reforms to the leasehold system for a generation’ has been hailed by campaigners as a ‘momentous’ day.

As a result of the bill being introduced into parliament, it will become easier and cheaper for leaseholders in England and Wales to buy their freehold, increase standard extension terms to 990 years for houses and flats, and provider greater transparency over service chargers.

In addition, the new legislation will help more leaseholders take over the management of their property instead of having to use the freeholder’s choice.

MoneyWeek have said the bill is the ‘latest attempt to reform the leasehold system of property ownership’ after the government banned ground rents on new leases in 2022.

Before the bill was introduced to parliament on Monday, Michael Gove said: ‘People work hard to own a home. But for far too long too many have been denied the full benefits of ownership through the unfair and outdated leasehold system.

‘That’s why liberating leaseholders forms a vital part of the government’s long-term plan for housing.

‘So [Monday] marks a landmark moment for millions of leaseholders across the country, as we unveil laws to deliver significant new rights and protections, slash unfair costs and crack down on exploitation.’

A full list of all the reforms in the bill include:

• Making it cheaper and easier for people to extend their lease or buy their freehold so leaseholders pay less to have more security in their home
• Increasing the standard lease extension term to 990 years for houses and flats, so leaseholders can enjoy secure ownership without the hassle and expense of future lease extensions
• Giving leaseholders greater transparency over their service charges by making freeholders or managing agents issue bills in a standardised format that can be easily challenged
• Making it cheaper for leaseholders to take over management of their building, allowing them to appoint agents
• Allowing leaseholders to exercise their enfranchisement rights as they won’t have to pay freeholder’s costs when making a claim anymore
• Extending access to redress schemes for leaseholders to challenge poor practice
• Making buying or selling a leasehold property quicker and easier by setting a maximum time and fee for home buying and selling information
• Granting homeowners on private and mixed tenure estates comprehensive rights of redress, so they receive more information about what charges they pay, and the ability to challenge their reasonability

Currently, almost five million homes in England are owned as leasehold of which 70% are flats ad 30% are houses, according to the latest government figures.

The government is also already consulting on options to cap ground rents for existing leases that will protect leaseholders from facing unregulated ground rents for no service in return. The consultation for this closes on 21st December.

Image: David W. Meyer