On 27 June 2019, James Brokenshire, Secretary of State for Housing, Communities & Local Government, announced government reforms to address poor leasehold practice.
The plans including reducing ground rent on new leases to £0, all new houses being sold freehold, and time and fee limits for freeholders providing key information for the sale of a property. There are around four million leasehold properties in England, almost a fifth of the housing stock, so these reforms will affect significant numbers of homeowners as well as those working in conveyancing and enfranchisement.
The Association of Leasehold Enfranchisement Practitioners (ALEP) has welcomed the reforms as “fairer”, promoting “transparency and clarity” and “making the system just for leaseholders and freeholders alike”. In its response, ALEP also highlighted the important role of specialist practitioners in leasehold who understand the complexities of this area of law.
Leasehold ‘traps’ and disputes have hit the national headlines on a regular basis in recent years, with reports of homeowners unable to pay expensive service charges and unable to sell due to escalating ground rent terms. There are concerns that poor advice during the purchase process has meant that homebuyers have not been aware of what they are really buying.
ALEP Director Mark Chick, a partner in Bishop & Sewell, will be speaking at Central Law Training’s Enfranchisement and Lease Extension Conferencetaking place in London on 1 October 2019. He is joined by a variety of other experts, including Ellodie Gibbons of Tanfield Chambers who has assisted the Law Commission with its review of enfranchisement legislation. This is a must-attend annual event for practitioners in this evolving area.
To find out more, visit https://www.clt.co.uk/Conference/Enfranchisement-and-Lease-Extension-Conference-2019/
The government’s consultation ‘Implementing reforms to the leasehold system’ looked at how a number of measures to tackle unfair practices in the leasehold market should work in practice. The consultation received over 1,200 replies, demonstrating the strength of interest in the issue. This document provides a summary of responses to the consultation. It also provides the government’s response which includes confirmation of our commitment to legislate to ensure that all new houses will be sold on a freehold basis, with specific exemptions for exceptional circumstances, and to reduce ground rents on future leases to a peppercorn (zero financial value).