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The Leasehold and Freehold Reform Bill finally receives royal assent

The Leasehold and Freehold Reform Bill finally receives royal assent

Andrew Luxton MRICS FARLA, partner of StagsAndrew Luxton MRICS FARLA, senior partner and head of residential lettings, looks at what the announcement of an election means for upcoming legislation.

The Leasehold and Freehold Reform Bill finally received Royal assent and became law on Friday, 24th May 2024.  It was included as part of the ‘wash-up’ as the House of Lords dealt with bills prioritized with cross-party agreement, following the announcement of the general election on Wednesday, 22nd May 2024.  The Renters Reform Bill, another key piece of housing legislation, failed to be included and, as such, will not be passed before the election.

Andrew Luxton confirms that whilst the legislation is far from perfect it is a start to the reform of the outdated legislation, which had become not fit for purpose.  There will be a ban on the sale of new leasehold houses and every new home in England and Wales will be freehold from the outset.  The Act will also remove the requirement for a new leaseholder to own their property for 2 years before a lease can be extended or the freehold purchased. 

The new law will make it commonplace to extend a lease and information about leasehold property will be more transparent to make buying, selling and renting leasehold property easier.  The legislation did not include a cap on ground rents for existing leaseholders or the regulation of property agents.  However, it does strength consumer rights with the standard lease extension term being increased to 990 years for houses and flats where previously it was 50 years for houses and 90 years for flats.  In addition, leaseholders will have greater transparency over service charges and who manages the building, as well as other benefits. 

The bill is warmly welcomed, as can be seen by the cross-party agreement, but it will be left until after the election to see the direction of future housing legislation.

For guidance on property related legislation, reach out to your local Stags branch or our professional services.