Leasehold and Freehold Reform Bill 2023-24: Progress of the Bill

Report stage and third reading of the Leasehold and Freehold Reform Bill [158 of 2023-24] as amended in Public Bill Committee, are scheduled for 27 February 2024. This briefing provides an overview of the progress of the Bill through the House of Commons prior to report stage.

The Bill together with its explanatory notes, impact assessment and transcripts of the parliamentary stages are available on the Parliament website: Leasehold and Freehold Reform Bill.

What would the Bill do?

The Bill applies to England and Wales. It would make long-term changes intended to improve homeownership for leaseholders and freeholders in England and Wales.

It implements commitments in the 2017 housing white paper to “improve consumer choice and fairness in leasehold” and in the Conservative Party Manifesto 2017 (PDF) to “crack down on unfair practices in leasehold”. It also takes forward many of the leasehold reform recommendations made by the Law Commission in their reports of 2020.

The Library briefing, Leasehold and Freehold Reform Bill 2023-24, provides an overview, policy background and comment on the Bill, as it was originally introduced.

Second reading in the Commons

The Leasehold and Freehold Reform Bill [013 of 2023-24] was introduced to the House of Commons on 27 November 2023.

The Bill had its second reading on 11 December 2023 where it was broadly welcomed, although the Government faced criticism for the length of time it had taken to bring the legislation forward. Some MPs expressed frustration at the limitations of the Bill, including the fact that it did not include any provisions to ban leasehold for flats or houses or to reinvigorate commonhold. MPs outlined the specific areas of the Bill that they hoped would be strengthened in the Public Bill Committee.

Winding up the debate, Lee Rowley, the Housing Minister, thanked all the campaigners and others who had spent many years working in this area. He welcomed the consensus across the Commons on the need for leasehold reform. Responding to criticism that the Bill did not go far enough in reforming leasehold, he said the Government had sought to bring forward a Bill that was “practical, achievable and makes a difference.”

Public Bill Committee in the Commons

The Bill was considered by a Public Bill Committee over twelve sittings between 16 January and 1 February 2024. Oral evidence was taken from expert witnesses during the first four sittings.

The Government tabled 124 amendments to the Bill, including 24 new clauses and one new schedule, all of which were agreed. The majority of the amendments were minor, technical or consequential. Substantive additions to the Bill included:

• new redress schemes for leaseholders and freeholders on private or mixed-tenure estates.

• the right for freeholders on estates to apply to the tribunal to appoint a substitute manager where their estate management company is failing.

• measures to ensure that relevant property sales information is provided to leaseholders and freeholders on estates in a timely manner.

The Opposition tabled 72 amendments to the Bill, including 24 new clauses, none of which were agreed. These included provisions to:

• abolish forfeiture of a long lease.

• increase penalties for non-compliance.

• amend the non-residential limit for collective enfranchisement and the percentage of qualifying tenants required to participate in an enfranchisement claim.

• require that all leases on new flats should provide leaseholders with a share of the freehold and establish a residents’ management company.

• introduce a right for freeholders to manage the estates they live in.

• regulate property managing agents.

• strengthen measures to protect leaseholders from paying for historical fire safety remediation costs.

The Shadow Housing Minister indicated that Labour might come back to some of these issues at a later stage of the Bill.

The Housing Minister said he would write to members of the Public Bill Committee in response to the many detailed questions that were raised during committee stage.

What measures are not in the Bill?

At second reading the Housing Minister said the Government intended to include the outcome of the consultation on restricting ground rents for existing leases in Government amendments to the Bill at committee stage. No such amendments were tabled.

The background briefing notes to the King’s Speech on 7 November 2023 said the Bill would:

• ban the creation of new leasehold houses.

• protect leaseholders by extending the measures in the Building Safety Act 2022 to ensure it operates as intended.

These provisions have not yet been included in the Bill.