New leasehold reform was outlined by King Charles as he delivered his inaugural King’s Speech at the opening of Parliament this morning.
In line with the proposed Leasehold and Freehold Bill, expected to be brought to Parliament in the coming months, the King recognised the introduction of the bill, in the hopes of “making it cheaper and easier for leaseholders to purchase their freehold.”
The King also outlined the bill’s intention to tackle “the exploitation of millions of homeowners through punitive service charges.”
Mobeen Akram, national new homes account director at Mortgage Advice Bureau, said that the proposed reforms to this dated approach is a step in the right direction.
She said: “The proposed reform of the leasehold bill, as outlined in the King’s Speech, is a long-awaited and much-needed change.
“This proposal is a breath of fresh air for prospective homebuyers and housing developers in England and Wales. It heralds a brighter future for the new homes market, making homeownership more accessible.”
She continued: “Sky-high service charge payments only benefit those with the leaseholder title, and the proposed reforms to this dated approach would be regarded as a step in the right direction by future homeowners and mortgage professionals alike.
“However, for those holding leaseholds on new build flats, the struggle continues. More work is needed to ensure that all homeowners, regardless of their leasehold status, can enjoy a level playing field.”
Myron Jobson, senior personal finance analyst at interactive investor, added: “The King’s Speech was a blend of motherhood and apple pie with few notable titbits pertaining to personal finances.
“One of the more notable announcements is the confirmation of the long-awaited update on leasehold reform.
“The Government pledged to make it easier for leaseholders to purchase their freehold and fight excessive service charges – which is likely to be music to the ears of owners of the estimated 4.86 million homes in the UK subject to leasehold arrangement.
“Households will eagerly await the Autumn Statement to see whether there will be further announcements that could help shore up their finances as inflation continues to ease and the nation enters a new normal of higher interest rates.”
Further reaction:
Jeremy Leaf, north London estate agent and a former RICS residential chairman:
“What is crucial is that any measures announced in the King’s Speech help people get on with their lives, which is not only important for the individuals involved but the market generally.
“Housing market reform has been promised for a while. However, we need more detail on what’s involved and a fairly strict timetable for delivery, as well as realistic aspirations.
“Otherwise, all that happens is more uncertainty and distress is created.
“While we welcome a ban on new leasehold houses, it is disappointing that flats are not included in the legislation, as we wanted to see new and existing flats and houses included.
“Indeed, flat owners and those considering buying flats are looking for change as much as those purchasing houses, particularly given that flat owners often also have cladding issues to contend with. It’s no surprise that many are thoroughly fed up with everything.
“It is also important to look at reducing what can be huge maintenance and legal costs over which occupiers exercise very little control or transparency.
“As well as this, control over those who administer these charges is important because you can have huge blocks of flats run by those with little knowledge and experience, who end up being responsible for hundreds of thousands of pounds.”
Timothy Douglas, head of policy and campaigns at Propertymark:
“Many agents and leaseholders will be relieved that plans have been set out in the King’s Speech for new legislation to further reform the leasehold system.
“This is long overdue and it is welcome that the UK Government has recognised the importance of reforming the court system and protecting the rights of landlords to get their property back when things go wrong before significant changes to private renting in England are introduced.
“We look forward to working with the UK Government to ensure both pieces of legislation are evidence based and fit for purpose.”
