Linz Darlington on The Future of Leasehold Reform
Leasehold Reform is a topic that has been discussed regularly in the news, and parliament since 2017. The idea of a leasehold on properties is often thought of as archaic and unfair.
To put in bluntly, in recent years, leasehold tenure has been broken. Many leaseholders have paid the same for their properties as they would have done with a freehold tenure. However, they now find themselves paying high ground rent and considerable costs to extend their leases.
Equally, many freeholders charge for permission for everything from letting a flat to getting flooring replaced. The situation is worse for many owners in blocks of flats, who are often obliged to pay high service, maintenance, and insurance charges, without seeing a great deal in return.
However, the now defunct Conservative Government recently passed The Leasehold and Freehold Reform Act 2024 that would make changes for the good of leaseholders – though it could still be seen as a muted win rather than an outright success due to the many omissions that were made.
Leaseholders have had to wait years for changes to be made, only for a new government to come in just as they were meant to be made and potentially debate it all over again and make more changes.
In the recent King’s Speech that took place on 17th July, the new Labour Government have promised to provide a “draft” Leasehold and Commonhold Reform Bill in the upcoming parliamentary session – which will restrict new leasehold properties and reinvigorate commonhold.
While this is good news for leaseholders generally, for those wanting to extend their leases or purchase their freeholds, yet more legislation is a mixed blessing. What these people need is the Labour Government to concentrate on implementing the Leasehold and Freehold Reform Act 2024, passed in the last parliament.
The provisions needed to make lease extensions cheaper for people with high ground rents or leases below 80 years is included in this legislation. However, it currently offers absolutely no benefit to anyone – because it isn’t yet in force!
In order for many provisions of the 2024 legislation to be commenced, there needs to be additional work done on this existing legislation – including setting the rates used to calculate whether lease extension prices will go up or down.
Many leaseholders have their lives on hold because they have properties which they cannot sell or mortgage due to short leases. What these people need is the Labour Government to concentrate on implementing the 2024 legislation, before they get started on the next thing.
The new draft bill could easily become a distraction from getting the existing law implemented. It is likely to rip up lots of the old legislation and start again. The Government might see investing in the work required to put this into force is the equivalent to installing a new kitchen in a house that they fully intend to knock down in a few short years.
The word “Draft” in the title of the new bill is telling – this is not included in the title of most of the proposed pieces of legislation. This suggests that this new legislation won’t pass in this parliamentary session – so leaseholders could be left waiting for years to see the benefit of it.
The Labour Government, in the briefing note for the King’s Speech, promise to “act quickly” and leaseholders certainly need them to implement the existing legislation without delay.”
Byline: Linz Darlington, MD and Founder of Homehold
About Linz Darlington and Homehold
Linz Darlington is one of the UK’s leading experts in leasehold extensions and leasehold reform. He is the MD and Founder of Homehold which provides an end-to-end lease extension service – including both valuation work and legal work. He is also a Director of Leasehold Legal Services, which is a firm of solicitors which has been set up to assist with Homehold’s lease extension cases.
Overseeing at least 400 leasehold extensions a year, Linz has over five years of experience at the coal face of negotiating lease extensions, attending the First Tier Tribunal as an Expert Witness, and helping leaseholders get the very best deal.
The story of Homehold began in 2016 when Linz started looking for someone to help him extend the lease on his maisonette. After a long, confusing and expensive process, he started a company that would work only for leaseholders. Their team have collectively completed thousands of lease extensions, with hundreds of five-star reviews on Google and Trustpilot, with the aim of saving homeowners thousands of pounds in legal fees.
