On the 11^th December 2023, the Leasehold and Freehold Reform Bill will have its second reading in the House of Commons. The hope is that this new legislation will increase fairness for residential leaseholders across England and Wales and provide further protection to homeowners who receive inadequate services or very poor value for money.

The proposed changes include:

1. Increasing the existing lease extension term available for houses and flats up to 990 years (from 90 years for flats and 50 years for houses!) This should reduce the need for regular lease extensions and provide homeowners with better security.
2. The introduction of capped fees that freeholders can charge for providing required information on a sale (e.g. insurance documents and finance records.). When leaseholders come to sell their property, management packs can be notoriously expensive, so this will be a welcome change for homeowners.
3. A complete ban on the sale of new leasehold houses unless there are exceptional circumstances. This will mean every new house will have to be freehold.
4. The requirement for transparency in service charges which will allow homeowners to examine exactly what they are being charged for – and make it easier to challenge!
5. Wider access to ‘redress’ schemes. This will allow leaseholders to challenge poor services from the freeholders/management company without needing to go all the way to court.
6. The presumption that a leaseholder pays the freeholder’s legal costs will be scrapped, making it a lot cheaper for leaseholders as each party will be responsible for their own legal costs. This will also address disparity in negotiations where the cost of discussions is met entirely by the leaseholder, giving freeholders little incentive to resolve things quickly and efficiently.

Whilst the Leasehold and Freehold Reform Bill has promise, it is still unknown when these proposals will become actual legislation. The changes will probably not be seen until 2024 at the very earliest and if there is an early election the whole Bill may fall out of the legislative timetable. For now, it is a bit of a waiting game and we shall hopefully see more progress next year. For guidance or advice on any of these issues, please contact Alice Truelove on 01604 887455 or via email at alice.truelove@maxengel.co.uk.