On 21 December 2017, following a consultation exercise, the Government announced plans to tackle the growing problem of newly built houses being sold as leasehold rather than freehold, and to limit ground rents on newly created lease agreements. Leasehold reform has been included in the Law Commission’s 13th Programme of Law Reform – this work includes making buying a freehold or extending a lease “easier, faster, fairer and cheaper.”
Full details can be found in the Library briefing paper Leasehold and Commonhold Reform.
The Government’s consultation paper on Implementing reforms to the leasehold system in England (PDF 377 KB), published on 15 October 2018, sought views on implementing the commitments set out above, specifically:
- How to ban the unjustified use of leasehold for new houses.
- How to reduce future ground rents to a nominal value.
- How to bring about fairer and more transparent service charges for freehold properties. For more information, see our page on Freeholder’s estate and service charges.
- How to improve the process of selling leasehold properties.
The outcome of the October 2018 consultation exercise was published on 27 June 2019: Implementing reforms to the leasehold system in England: summary of consultation responses and government response (PDF 578 KB).
The aim is to legislate “as soon as Parliamentary time allows”. The October 2018 consultation paper included reference to potential legislation in 2019 “which would be unlikely to complete its passage until mid-2020 at the earliest”.
The sections below set out the timetable for various consultation exercises.
The Law Commission’s work
The Law Commission’s work on leasehold reform is ongoing. In line with the Government’s request, the Commission has prioritised measures for the owners of leasehold houses.
On 19 July 2018, the Commission published proposed measures (PDF 477 KB) to help existing leasehold homeowners buy the freehold of their houses. This was followed in September 2018 with a consultation paper (PDF 7.12 MB)– responses were invited up to 20 November 2018. The paper proposed “a new, single regime for leasehold enfranchisement designed to benefit leaseholders of houses and flats.” A summary version of the consultation paper (PDF 884 KB) is available. A final report is expected later in 2019.
On 4 July 2018, James Brokenshire, then Secretary of State, asked the Law Commission to look at improving the Right to Manage. A consultation exercise was launched in January 2019 with a closing date of 30 April 2019. A final report is scheduled for September 2019.
The Law Commission issued Commonhold: A Call For Evidence (PDF 771 KB) on 22 February 2018 – submissions were invited up to 19 April 2018. A public consultation exercise was launched on 10 December 2018 with submissions accepted up to 10 March 2019. A report is expected later in 2019.
Other Government proposals
The Government has said it will:
- Require all property/managing agents to be regulated. A working group has developed recommendations for the regulatory regime – the group published its report, Regulation of Property Agents Working Group: Final Report (PDF 655 KB), in July 2019.
- Make buying and selling a leasehold property easier with timescales for agents and freeholders to respond to leasehold queries and maximum fees. There is an intention to introduce standard mandatory forms for leasehold information.
- Consider the introduction of a single housing ombudsman service to aid complaint resolution.
Onerous ground rents for existing leaseholders
On 28 March 2019, the Government published a new industry pledge which around 62 developers/agents have signed up to. The pledge sets out an intention to help existing leaseholders with onerous ground rent terms in their lease agreements.
Leasehold reform in Wales
On 1 May 2018, the Welsh Housing and Regeneration Minister, Rebecca Evans, announced that the Welsh Government had formally joined the Law Commission’s leasehold reform project. A multi-disciplinary task and finish group on leasehold reform was established. The Task and Finish Group issued a report, Residential Leasehold Reform (PDF 892 KB), in July 2019. The report is described as “just the end of the first key stage of the work” the Group is undertaking.