Today, industry experts and organizations have offered their views on the King's Speech, particularly on the Leasehold Reform Bill, which was a central piece of the government's legislative agenda. The Leasehold Reform Bill aims to address several issues surrounding leasehold properties, but there are varying opinions on its effectiveness and scope.
Charlotte Cook, a partner at Winckworth Sherwood, emphasized the initial endorsement of the Renters Reform Bill by a wide range of stakeholders, including private and social-housing landlords, as well as cross-party MPs. She noted that responsible landlords were already meeting many of the bill's requirements voluntarily, even before its introduction. While acknowledging the potential onerous nature of the registration process, Cook highlighted the professional signal it sends and the protection it provides against anti-social tenants.
Cook also pointed out the critical challenges the bill faces, including court backlogs and the need to address how future enforcement for landlords will be funded. She raised concerns about the funding gap for local authorities, which could complicate rigorous enforcement of the proposals. Cook stressed the importance of providing certainty and urgency in implementing the reforms for the benefit of all landlords and tenants.
On the other hand, Paula Higgins, Chief Executive of the HomeOwners Alliance, welcomed the Leasehold and Freehold Bill and the promised reforms. She expressed disappointment that the King's Speech did not directly address ground rents but understood the complexity of the issue, emphasizing the need for a comprehensive solution. Ground rents have already been abolished for new homes, but it remains crucial to cap or abolish them for the existing 5 million leasehold homes. Higgins highlighted the potential benefits for leaseholders in reducing their annual costs and making lease extensions more affordable.
However, Higgins criticized the government's approach, stating that the reforms fall short of completely ending the leasehold system. She argued that allowing the sale and purchase of leasehold flats in the future perpetuates an outdated feudal system. The HomeOwners Alliance continued to campaign for commonhold flats and a complete ban on leasehold.
Another major concern raised by Higgins was the availability of parliamentary time. With over 20 Bills announced in the King's Speech, she stressed the urgency of seeing a draft Leasehold Reform Bill by Christmas. Without a clear legislative framework, these reforms could remain unfulfilled promises, leaving leaseholders to continue facing challenges.
As the single most significant block on housing development, the issue of nutrient neutrality is the main contributor to the housing crisis. At least 150,000 homes have been delayed because of the of the Government’s failure to address the issue – and of these at least 45,000 are much-needed social / affordable housing units.
Only last month, Michael Gove told the Conservative Party that he wanted the rules to be scrapped “at the first available opportunity” and so it is extremely disappointing that this opportunity has now been lost. The continued uncertainty will continue to the detriment of those most in need.
Linz Darlington, lease expert and founder of Homehold, lease extension specialists says: “The promises of making it cheaper to purchase a freehold is fantastic news, and hopefully this will also extend to lease extensions.
“This is likely to include the Government’s promise to enact their ban on marriage value, which will be particularly beneficial to those people who have leases that have dropped below 80 years.
“In many cases this will reduce the cost of a lease extension or freehold purchase by between one-third and two-thirds.
“The removal of marriage value is something which large freehold investors will almost certainly lobby and litigate against enthusiastically. However, the Government must stand firm on this commitment, because ultimately marriage value is paying a sum to freeholders above what they would receive if they sold their assets on the open market.”
In conclusion, the industry's reaction to the King's Speech and the proposed Leasehold Reform Bill is mixed. While some stakeholders acknowledge the positive steps taken to address leasehold issues, others argue that the reforms do not go far enough and emphasize the need for swift legislative action to bring about lasting change in the housing market. The future of leasehold reform remains a topic of significant debate and discussion.