APRIL 2025
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Leasehold Reform
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There is nothing specific to report this month, but, as we enjoy the sunshine, here is a reminder of what is coming up later in 2025:
LEASEHOLD REFORM
The Government have said that, in relation to the Leasehold and Freehold Reform Act 2024, it will:
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be looking to consult on the Act’s provisions on service charges and on legal costs, bringing these measures into force as quickly as possible thereafter. Once implemented, leaseholders will be able to more easily challenge service charges they consider unreasonable, and landlords will be required to apply to the relevant court or tribunal for approval before they can pass legal costs from such challenges back to leaseholders
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the Act includes measures that will make it cheaper for leaseholders to enfranchise – buy their freehold or extend their lease, giving them security over their property in the long term. In summer 2025 the Government will be consulting on the valuation rates used to calculate the cost of enfranchisement premiums. Parliament will then need to approve the secondary legislation that sets out the detail
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in the second half of 2025 publish a new Draft Leasehold and Commonhold Reform Bill (which will, amongst other things, include the banning of ground rent and forfeiture) that would be subject to broad consultation and additional parliamentary scrutiny. Prior to that it will in early 2025 publish a White Paper on reforms to commonhold
It will also be consulting in 2025 on the best approach to banning new leasehold flats so this can work effectively alongside a robust ban on leasehold houses. It will also be engaging on the conversion of existing flats to commonhold
JUDICIAL REVIEW
The Judicial Review of certain provisions of the Leasehold and Freehold Reform Act 2024 (including in relation to the proposed changes to marriage value when calculating the premium to be paid for a Statutory Lease Extension) is set for July
THE RENTERS RIGHTS BILL 2024
This Bill is currently going through the Committee Stage in the House of Lords
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Whist it mainly deals with residential lettings, one advantage of the Bill (if it becomes law in its current form) is that it contains a provision making it clear that tenancies over 7 years cannot be assured tenancies
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The importance of this is that one of the current issues with residential Leases is that those where the Ground Rent payable exceeds £250 per annum (or £1,000 per annum in London) are classed as assured tenancies under the housing Act 1988, which has adverse consequences where there are rent arrears
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At present a Deed of Variation is usually required to overcome the issue, but such a Deed should no longer be necessary once the Renters Rights Bill is passed into law
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