Lucy Barber speaks to PrimeResi and Property Week on Leasehold and Freehold reform plans
The announcement by Housing Minister Matthew Pennycook, relating to the Government’s intentions to deal with flaws in the existing Leasehold & Freehold Act 2024, has not moved matters forward for the enfranchisement industry and highlights how there are no quick and easy solutions to the issues that have been slowing up the legislation for years. The industry is effectively on pause, with leaseholders waiting to extend their leases with uncertainty around what might be changing. With a quick decision looking unlikely, and if reforms continue down this route, the industry may not be able to hit the play button for some years yet.
Read the full articles in PrimeResi here, and Property Week here.
“As a freeholder or leaseholder the announcement leaves you no further forward than they have been for many years. The two year rule whilst helpful has in practice never been too much of a hindrance as sellers are able to serve leave extension notices as part of the sale and the buyer can be assigned the benefit of them when they complete their purchase and continue with the lease extension process.
The position is still uncertain, the timing is uncertain and the eventual drafting of the legislation is uncertain. Leaseholders and freeholders are in the same position they have been for many years. The announcement seems only to confirm what we all already knew and that is that the task is huge and complicated and not easy. There are no quick and easy answers to any of the issues that have slowed up the legislation to date, if there were we would no doubt be a lot further forward.
It has been dragging on for so long now that I suspect those that work in the enfranchisement industry would like to see a decision of some sort promptly on the valuation issues so that the industry that is largely on pause, and how now been for many years, can become unstuck and leaseholders can extend their leases and move on rather than being in this forever limbo of what might be changing.
A quick decision looks unlikely however unless they resolve to simply scrap the proposals to change the valuation basis of lease extensions and continue with the status quo and with the Human rights cases also now initiated, if the reforms continue down this route those in the industry may not be able to hit the play button for some years yet.”
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