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The long-awaited Leasehold Reform Act was one of a handful of bills which made it through  in Parliament before it shut down ahead of the General Election on 4th July. The Act, a longstanding manifesto commitment, officially received Royal Assent. We take a look below at what this actually means in practice.


The Act enhances existing consumer rights and introduces new protections for leaseholders by:

  • Making it cheaper and easier for people to extend their lease or purchase their freehold, resulting in lower costs for leaseholders.
  • Providing greater transparency over service charges by requiring freeholders or managing agents to issue bills in a standardized format that can be more easily scrutinized and challenged.
  • Increasing the standard lease extension term to 990 years for both houses and flats (up from 50 years for houses and 90 years for flats).
  • Reducing costs for leaseholders exercising their enfranchisement rights, as they will no longer have to cover the freeholder’s costs when making a claim.
  • Extending access to redress schemes for leaseholders to challenge poor practices. The government will require freeholders who manage their buildings directly to belong to a redress scheme, similar to the requirement already in place for managing agents.
  • Simplifying and speeding up the process of buying or selling a leasehold property by setting a maximum time frame and fee for obtaining home buying and selling information.
  • Providing homeowners on private and mixed tenure estates with comprehensive rights of redress, including more information about charges they pay and the ability to challenge their reasonableness.
  • Making it easier and cheaper for leaseholders to take over the management of their building, allowing them to appoint a managing agent of their choice.

Additionally, the Act benefits leaseholders by:

  • Eliminating the presumption that leaseholders must cover their freeholders’ legal costs when challenging poor practices, removing a deterrent to contesting service charges.
  • Banning opaque and excessive buildings insurance commissions for freeholders and managing agents, replacing them with transparent and fair handling fees.
  • Removing the requirement for a new leaseholder to have owned their house or flat for two years before they can extend their lease or purchase their freehold.
  • Prohibiting the sale of new leasehold houses, ensuring that, except in exceptional circumstances, every new house in England and Wales will be freehold from the outset.

We welcome these changes to the law and feel they can only benefit homebuyers. It is a shame that the government were unable to bring about a proposed cap to ground rents but there is much here to be encouraged by.

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