Leasehold Reforms Pass Without Ground Rent Cap
The Leasehold and Freehold Reform Bill passed through Parliament before dissolution, but concerns remain that the reforms are not comprehensive enough.
The new law in England and Wales includes changes to leasehold regulations, but the promised cap on ground rents has been removed.
This bill was expedited through Parliament before the upcoming general election on July 4, with the government emphasizing that homeowners will have increased rights and protections under the legislation. However, critics argue that it falls short of addressing the issues faced by many leaseholders nationwide.
Leasehold arrangements involve a form of homeownership where leaseholders do not own their property outright but have a contractual relationship with the freeholder who owns the land.
Key reforms in the bill extend the standard lease term to 990 years, mandate a standardized format for service charge invoices to enhance transparency, and simplify the process for leaseholders to take over the management of their building from the freeholder.
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However, the bill does not include the previously proposed cap on ground rents or any revisions to forfeiture rules, leaving leaseholders vulnerable to losing property value over minor disputes.
Earlier this year, MPs lobbied for stricter limits on ground rents and an end to forfeitures, with Minister Lee Rowley mentioning ongoing consultations on these issues.
During the final discussions in Parliament, Labour’s Lord Kennedy of Southwark criticized the legislation for falling short of its promises, urging the government to do more. Conservative Lord Gascoigne defended the bill, stating that it is a positive step forward, while confirming that forfeiture and ground rent changes were not part of the final law.
Other Conservative peers raised concerns about the rushed nature of the bill and potential legal challenges it might face. They highlighted that certain provisions were not initially planned for the pre-election legislative agenda.
On the last day of the session, the Victims and Prisons Act, the Pet Abduction Act, and the Paternity Leave (Bereavement) Act were all successfully passed, addressing various issues including victim compensation, animal welfare, and parental leave rights. However, high-profile bills related to tobacco regulation and renter protections were either delayed or omitted from the final legislative slate.
PA Media contributed to this report.
