January 24, 2025 3:59 pm

Insert Lead Generation
Nikka Sulton

The government has confirmed plans to implement a key provision of the Leasehold and Freehold Reform Act next week, a move expected to provide leaseholders with greater flexibility and potentially lower costs. Housing minister Matthew Pennycook has signed regulations that will abolish the two-year ownership rule. This means leaseholders of flats and houses will no longer need to wait two years after purchasing a leasehold property to extend their lease or buy their freehold.

This change is being hailed as a positive step towards addressing longstanding concerns within the leasehold system. By removing this restriction, leaseholders will be able to act immediately upon acquiring their property, offering greater control over their housing situation. Additionally, it is expected to lower the financial burden on leaseholders, as they can now take advantage of opportunities to secure their freehold or extend their lease sooner, avoiding delays that often result in higher costs.

The National Leasehold Campaign (NLC), a leading advocacy group for leaseholders, welcomed the announcement but highlighted that significant issues remain unresolved. The NLC acknowledged the government’s efforts but pointed out that the reforms still fall short of addressing the core challenges faced by millions of leaseholders across the country. According to the organisation, the delay in activating other critical parts of the Act leaves many leaseholders in what they describe as “Leasehold limbo.”

One of the main concerns raised by the NLC relates to the valuation section of the 2024 Leasehold and Freehold Reform Act, which has not yet been implemented. Without this section being enacted, leaseholders are still subject to inflated premiums and high legal fees when attempting to buy their freehold or extend their lease. This, the NLC argues, undermines the effectiveness of the reforms and continues to trap leaseholders in a financially burdensome system.

The NLC has called on the government to prioritise the activation of the valuation provisions within the Act. They argue that this change is essential to ensure leaseholders can enfranchise or extend their lease in a way that is quicker, simpler, and more affordable. The group emphasised that this is not just a matter of convenience but a crucial step towards addressing the systemic inequalities within the leasehold system.

“Whilst we welcome the action, there is still a long way to go to deliver the promises leaseholders desperately need and deserve,” the NLC stated. “Without the valuation section of the Leasehold and Freehold Reform Act being switched on, many leaseholders remain in a state of ‘Leasehold limbo.’” The organisation added that the delay in implementing this section means that leaseholders are unable to escape the financial grip of freeholders, who continue to impose excessive charges.

The NLC also highlighted the urgency of the situation, pointing out that millions of leaseholders and the 30,000 members within their campaign are waiting for these reforms to take full effect. They noted that the current system continues to disproportionately benefit freeholder investors, leaving leaseholders at their mercy. The group described this as a system that traps tenants in an untenable situation, preventing them from achieving financial security and housing stability.

Freeholders, according to the NLC, have used the existing system to impose extortionate charges on leaseholders, further exacerbating the affordability crisis in the housing market. These charges, combined with the cost-of-living crisis, have made it increasingly difficult for leaseholders to save money, let alone afford the premiums required to buy their freehold or extend their lease. This has left many feeling trapped, unable to break free from a system that prioritises the interests of investors over homeowners.

The campaign group reiterated its call for urgent action, urging the government to fulfil its promises and deliver comprehensive reform. They stressed that time is running out for leaseholders who are desperate for a solution to the financial challenges posed by the current system. The NLC argued that activating the valuation provisions would be a decisive step towards levelling the playing field and empowering leaseholders to take control of their housing situations.

While the recent announcement represents progress, it is clear that much work remains to be done to ensure the reforms deliver meaningful change. Leaseholders across the country are watching closely, hoping that the government will follow through on its commitments to overhaul the leasehold system. For many, the activation of the valuation section is not just a policy change but a lifeline that could finally offer them the stability and security they deserve.

 

 

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