Leasehold and Freehold Reform Bill 2023
Leasehold and Freehold Reform Bill 2023
The Government is in the course of introducing a radical bill which seeks to reform the current system of leasehold in the UK.
The note below summarises the changes that the Government wish to introduce as at the date of publication of this Briefing Note.
The bill is currently at the committee stage which should be concluded by 25 January 2024.
The changes proposed in the Bill can be summarised as follows:
Leasehold Reform Act 1967 and Leasehold Reform Housing and Urban Development Act 1993
There be no requirement for a Tenant to hold the flat for a period of two years prior to making an Application for a new lease.
Any new lease term will increase from 90 years to 990 years.
There be an increase of the non-residential threshold to 50%.
Landlord’s costs will only be payable in specific cases.
There will no longer be the requirement to wait for 12 months upon a withdrawal or deemed withdrawal of a new claim.
A Landlord will no longer be able to oppose a claim on the basis that he/she will be a resident landlord (or a member of the family).
A Landlord will no longer be able to oppose a claim on the basis that the land is required for public purposes or on the grounds of redevelopment.
Price and Premium Calculations
Payments for Marriage Value and Hope Value will be abolished.
The calculation rates will be set and an online calculator will be available. In some cases, this will ground rent at 0.1% of the value of the property when calculating the price.
Specific deferment and capitalisation rates to be set at a later date.
Ban on sale of new leasehold houses
This was not included within the Bill, but it is likely that the omission will be included via amendment.
Ground Rent Consultation
The capping of ground rents for existing leases is currently under consultation.
There are 5 proposed options:
(a) Capping to a peppercorn
(b) Capping to a maximum figure
(c) Capping to a % of the property
(d) Capping at the original amount when the lease was granted
(e) Freezing at current levels
There was cross party support for the bill, but Labour and the Liberal Democratic parties felt it did not go far enough in assisting leaseholders and the bill was badly drawn and rushed.
