Prime Minister Sir Keir Starmer has announced major reforms which are set to “fundamentally rewire” homeownership across England and Wales.
The draft Commonhold and Leasehold Reform Bill aims to bring forward reforms designed to modernise, strengthen and reinvigorate the commonhold and leasehold framework.
What are the proposed changes?
- Ground Rent will be capped at £250 a year, and after 40 years it will be cut to a peppercorn rent;
- New leasehold flats will be banned. New flats will instead be built as commonhold, allowing the purchaser to own the ground the flat is built on and the overall building with neighbours;
- Existing leaseholders will get the right to switch to commonhold;
- Forfeiture in residential leasehold is set to be scrapped, with a new statutory lease enforcement scheme introduced;
- Service charges and building costs are set to be more transparent, making payments clearer to understand;
- Repealing unfair enforcement powers that apply to estate rentcharges on privately managed freehold estates.
What impact will these changes have?
The reforms aim to give leaseholders and future homeowners stronger control and powers.
The changes are set to save homeowners hundreds of pounds, to assist with cost of living.
It is also hoped that the reforms will unlock house sales where unfavourable ground rent terms make them hard to sell.
The bill will now be scrutinised by MPs on the Housing Committee before making its way through Parliament.
If you have any questions in relation to purchasing property, please contact us.
Joshua Simpson
Real Estate Associate Solicitor
Joshua is an Associate Solicitor within our Real Estate team who is experienced in handling a variety of complex legal matter types.
