The Standard reported recently that, King Charles III announced in his speech that the leasehold reform bill (something which has been in the pipeline since 2017) is finally ready to be introduced. In short, this means that we could see a leasehold reform act as early as 2024.
The prevailing view though, is that with a general election likely next year, the timing of this announcement indicates that there’s much uncertainty around whether this bill will make it through in time before that election is called. In short, either way, a change of government is certain in one form or another, meaning that we could expect a delay at best. Both major political parties have indicated that they intend to implement significant changes to the system but in politics, anything can happen. The general feeling is that if the bill is introduced before Christmas 2023, then that is a positive sign.
What is clear is that any future changes would be aimed mainly at house owners, but owners of flats will also be targeted in a bid to make the system of maintaining properties fairer. The most obvious question has always been in terms of why developers need to sell houses on a leasehold basis in the first place, something which seems hard to justify and which the government is looking to crack down on.
For flats, it is understandable that a shared building or property needs to be maintained in some way via a joint fund, but even here, the government is planning changes in order to move the industry away from levelling what many describe as unfair “subscription” style charges at the public. Particularly as those charges are set by the landowner.
Whilst it seems like a positive change for future buyers of new homes, it remains to be seen how this might affect people who currently own properties on a leasehold basis, particularly houses. Will existing leaseholds be transferred to new buyers? Will they be able to buy the freehold? How will future price increases be controlled?
There are a huge number of questions to be answered in what’s an incredibly complex legal minefield. One thing is for sure though, if the legislation does eventually come into force, it’s going to take a lot of careful consideration. Something which could take time…
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