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Leasehold Reform - Update

Sophie Campbell, George Calvert and Anna Favre, of Cripps, comment

The reform of the leasehold sector has been high on the Government’s agenda since the publication of the white paper entitled “Fixing Our Broken Housing Market” (7 February 2017) This stated: “Leasehold has been a traditional part of the housing market in this country but there are areas where urgent reform may be needed…”

Having identified a perceived issue with leasehold, in December 2017 the government went on to announce plans to prevent newly built houses being sold as leasehold rather than freehold, and to limit ground rents in new long leases. These changes were duly implemented in 2022.

When announcing the abolition of ground rents in new long leases, the then Secretary of State for Housing, Communities and Local Government stated that it was “the first part of seminal two-part legislation to implement reforms”. However, since then, there has been plenty of talk, but the second stage of the reforms appears to be no
further forward.

Why the reforms keep being delayed
It appears that the initial plans to abolish leasehold home ownership were too ambitious and therefore have been dropped. Michael Gove raised this as recently as January 2023 but that proposal has been abandoned in favour of revising the rules on leasehold, tackling abuse in the current system and attempting to reinvigorate alternative forms of home ownership such as commonhold.

A major issue with implementing the reforms is striking a fair balance between the rights and obligations of the landlord and the tenant. The topic of leasehold ownership covers a broad scope, and despite the reforms aiming to empower tenants, the Government acknowledge a landlord’s rights must not be neglected in the process. 

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