The Leasehold and Freehold Reform Act 2024 (“the Act”) marks significant progress for tenants and the simplification of an overly complex leasehold property market. Aiming to promote fairness, transparency and affordability, the Act looks to change life as we know it for both landlords and tenants.
What changes are set out in the Act?
- Abolition of ground rents
- Simplification of lease extensions
- Rights for tenants to manage their buildings
- Transparency of charges
- Protection from unfair practices
- Additional regulation of landlords and managing agents
How will this work?
This legislation looks to increase the control of tenants and minimise the financial burden of leasehold ownership to make it a more attractive prospect to homeowners, together with increasing the accountability of landlords. This move correlates with the broader policy objectives of the current Government to increase accessibility to housing. While the feedback is largely positive, challenges may arise with implementation ensuring compliance by landlords and managing agents.
What is next?
Whilst the provisions work their way into force through secondary legislation, further reform is anticipated after the King’s Speech set out the Government’s commitment to publish a Leasehold and Commonhold Reform Bill. This looks to further strengthen the position of the tenants when extending leases, managing buildings and acquiring freeholds. It will also aim to reinvigorate commonhold tenure with a vision of it becoming the “default tenure” and remove the threat of forfeiture for non-compliance in residential leases.
This Act marks a significant milestone in addressing the concerns in relation to leasehold ownership. However, it is clear this is just the tip of the iceberg when it comes to reform across the property sector – we shall see what comes out of the 2024-25 parliamentary session.
Please contact our Real Estate team if you require any further information regarding the Leasehold and Freehold Reform Act 2024.