Recent updates to leasehold properties as Housing Minister Matthew Pennycook confirms changes to leaseholder ownership under the Leasehold and Freehold Reform Act 2024.
In a statement Matthew Pennycook wrote: “I have today signed regulations to remove the two-year ownership rule for leaseholders of flats to extend their lease, and leaseholders of houses to extend their lease or buy their freehold.”
Colin Wooldridge, specialist Property Solicitor at Liverpool Legal Solicitors explains:
“This new legislation specifies that leaseholders would no longer be required to have owned a property for two years before they can extend their lease or buy the freehold. This comes into effect on 1 February 2025.
The Leasehold and Freehold Reform Act 2024 includes new rules that would also ban the sale of new leasehold houses other than in exceptional circumstances, increasing the standard lease extension term to 990 years – up from 50 years for houses and 90 years for flats with ground rent reduced to zero.
There will also be greater transparency on service charges, a ban on opaque and excessive building insurance commissions. The changes will make it easier for tenants to exercise enfranchisement rights and to become their own landlord.
The government has said that many of the provisions contained in the Leasehold and Freehold Reform Act 2024 will take years and not months to implement.
There are also several groups of freeholders who are seeking judicial review of the changes to enfranchisement premium calculations including for the loss of marriage value (for leases with less than 80 years to run) and the 0.1% ground rent cap (used to calculate the premium payable under the reforms).
It is anticipated that there will be further discussion surrounding lease extension during the summer. Owners and buyers of short leases (80 years or less) are hoping that once all the new act provisions are in force that lease extension premiums will go down. “
A statement from the government on 21 November 2024 set out a timetable for implementation of the Act.
February 2025 will see removal of the two-year restriction on enfranchisement and lease extension claims,
Spring 2025 will see the commencement on provisions in relation to the right to manage. To increase the access to the right for leaseholders in mixed use buildings,
During Summer 2025, a government consultation will take place on the valuation rates used to calculate the cost of enfranchisement premiums and consult on the implementation of the Act’s new consumer protection provisions for homeowners on freehold estates and on service charges.
A new Draft Leasehold and Commonhold Reform Bill can be expected during the latter part of this year.
At Liverpool Legal we have highly experienced, friendly and qualified solicitors dealing with the sales, purchase, transfers including leasehold and freehold property and land in the Northwest and beyond seamlessly and without delay.
For further information and to discuss your situation contact Colin Wooldridge on 0151 702 5400, send an email to enquiries@liverpool.legal or enter your details onto our contact form here.
Colin Wooldridge
Colin is a specialist Property Lawyer. He studied at Manchester Metropolitan University and BBP Law School, Manchester. Colin qualified as a Solicitor in 2008 and has specialised in Property Law for the last 7 years. He has extensive experience in all aspects of property law and has dealt with the full range of residential property conveyancing matters from starter homes to properties exceeding one million pounds. Colin deals with both residential and commercial property matters throughout the UK and he has a reputation among his clients for dealing with their property matters quickly professionally and efficiently. In his free time, he enjoys holidaying in Ireland with his family and playing tennis.