The Leasehold and Freehold Reform Bill was published on 27 November.

This was somewhat sooner than expected, and it is somewhat incomplete.
For example, the Bill does not contain a provision that bans the use of Leasehold for new-build Houses, however a government spokesperson has said “we will bring forward amendments as the bill progresses through parliament and that includes the ban on leasehold houses.”

What does the Leasehold and Freehold Reform Bill mean for leaseholders and landlords?

Here are the key changes:

Ground rents above 0.1% of the freehold value will be disregarded for premium calculations for extensions and freehold purchases, making it cheaper for leaseholders to buy out onerous ground rents

The provisions do indeed provide marked benefits to leaseholders with particular focus on Extensions and Freehold Purchases, both in the price payable, the terms, as well as expending the scope of qualification.

In still remains to be seen whether the bill will be passed by parliament in its current form, which as a matter course still needs to be approved by both Houses of Parliament.

Even if it does, which appears likely, there will be Developers and Landlords who are set to lose a substantial amount of money as a result of these changes and despite Michael Gove’s statements about the Bill not contravening Human Rights legislation, it would not be surprising to see such challenges made once the Act comes into force.

The Bill contains many other impacts that are also worthy of discussion. We shall provide a more in-depth breakdown in due course. In the meantime we welcome opinions on these reforms.

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