The Leasehold and Freehold Reform Bill has passed its second reading in Parliament, marking a step forward in proposed reforms to the leasehold system in the UK. The key points from the recent developments include:

• Comprehensive Reform Pledge:
  • Housing Minister Lee Rowley pledged that the legislation would offer comprehensive reform, aiming for a better system in the long term that levels the playing field and empowers people.
• Exclusion of Leasehold House Ban:
  • Concerns were raised during the House of Commons debate that the Bill excluded a previously-promised plan to ban leasehold houses.
  • Some MPs expressed disappointment that the legislation did not address the issue of leaseholds on new flats.
• Committee Stage and Potential Ban on Leasehold Sales of Houses:
  • The legislation will now proceed to the committee stage, where further discussions and amendments can be made.
  • There is hope that a ban on leasehold sales of houses will be introduced during the committee stage.
• Objectives of the Bill:
  • The Bill aims to make it cheaper and easier for existing leaseholders in houses and flats to extend their lease or buy their freehold.
  • Reforms also target making these types of properties easier to sell.
• Lease Extension Terms and Ground Rent:
  • The standard lease extension term will be increased from 90 years to 990 years for both houses and flats.
  • Ground rent will be reduced to £0.
  • The requirement for a new leaseholder to have owned their property for two years before benefiting from these changes will be removed.
• Maximum Time and Fee for Information Provision:
  • The Bill introduces a maximum time and fee for the provision of information required for a sale, such as building insurance or financial records, from a leaseholder’s freeholder.
  • Increased transparency over charges is emphasized.
• Presumption on Legal Costs Scrapped:
  • The legislation will scrap the presumption that leaseholders pay their freeholders’ legal costs.
• Concerns and Delays:
  • Some Labour MPs expressed concerns about the delays in bringing forward the reforms and criticized the absence of automatic support for introducing commonhold as an alternative form of tenure for new-build homes.

The passing of the second reading is a positive step, but further discussions and potential amendments are expected during the committee stage. The overall goal is to address issues within the leasehold system and provide a fairer and more transparent framework for leaseholders.