There was a lot for renters and landlords to talk about on Tuesday as new laws on leaseholds and court reforms featured in the first King’s Speech for more than 70 years. Here’s what you need to know:
Leasehold and Freehold Bill
The speech included a promise to make it “cheaper and easier” for leaseholders to purchase their freehold and to tackle the "exploitation of millions of homeowners through punitive service charges". The proposed Leasehold and Freehold Bill, set to be brought forward by the government following a consultation held at the start of 2022, will target inequality in the country’s housing market, with reforms to the controversial leasehold market that would ban the creation of new leaseholds.
This, however, would only apply in England and Wales for new houses and not flats which account for approximately 70% of leaseholds.
Measures to empower leaseholders by making it cheaper and easier for existing leaseholders in houses to buy their freehold, increasing the standard lease extension from 90 years to 990 years and removing the two-year ownership requirement for new leaseholders before they can benefit from the changes.
Leaseholders’ consumer rights are also set to be improved by making buying or selling a leasehold property quicker and easier, more transparency over service charges and administration fees, and scrapping the presumption for leaseholders to pay their freeholders’ legal costs when challenging poor practice.
The question on how far this proposed Bill can progress before the upcoming General Election next year does, however, throw the introduction of any new legislation in the near future into doubt. The issue does appear to be a priority for the government, with the launch today of a consultation on proposed reforms including capping ground rents at a so called “peppercorn” rate for existing leaseholders, freezing ground rents at current levels and capping the ground rents at a percentage of the property value. The consultation runs until 21 December. TO find out more, visit the consultation page here.
Renters (Reform) Bill
Also featuring in the King’s Speech was an update on the Renters (Reform) Bill, long-awaited government reforms to the private rental sector, which received a great deal of attention over the summer after being introduced to Parliament in May.
Reiterating previously made pledges, the speech said that the Bill will support the 11 million private tenants and 2.3million landlords in England with a range of measures including speeding up the court process through digitisation.
Further measures being proposed include:
- The abolition of “no fault” evictions” until stronger possession grounds and a new court process are in place;
- Strengthening landlord grounds for possession and introducing stronger powers to evict anti-social residents;
- The creation of a new Private Rented Sector Ombudsman aimed at supporting quicker and cheaper resolutions to disputes to reduce the costs of court proceedings;
- Endings the blanket ban on pets.
Further to this, the government has promised to bring forward amendments that would “squeeze out” criminal landlords, make it illegal to have blanket bans on renting to tenants in receipt of benefits or with children and introduce a new ground for possession to protect the student market.
Whilst generally supported, questions do remain around the timeframe for the Bill, given the legislation is still progressing through Parliament and that measure cannot be introduced until the court reforms have taken place.
Thrings’ Property Litigation lawyers are experienced in reaching resolution in property disputes, acting for both landlords and tenants, often without recourse to court proceedings, and with an excellent track record when cases do go to Court. To find out more, get in contact.
