Freehold and Leasehold Reform Act-lessees can control their own destiny
Matthew Pennycock, Minister of State for Housing and Planning, has made a Parliamentary Statement regarding the future progress of the Freehold and Leasehold Reform Act 2024.
The Government have formally recognised the “significant complexity of the task” and that the legislation was rushed in at the end of the last parliament and as a result contains loopholes and unintended consequences that need to be resolved by primary legislation.
What this means is that some provisions of the Act will not be in force for a number of years, perhaps 2026 / 2027, if at all. These include the changes to the valuation methods and the abolition of Marriage Value. There will be further consultation on valuation starting “next summer” so legislation prior to 2026 is highly unlikely.
The Minister did however confirm that the 2-year rule, meaning a leaseholder had to be the registered owner of the lease for 2 years before applying to extend, will be scrapped in January 2025.
He also confirmed that legislation on Right to Manage changing the qualifying criteria to include buildings with between 25% and 50% non-residential space would be brought forward in Spring 2025.
Gary Scott, a leasehold specialist at London solicitors firm, Spector Constant & Williams, said:
“The fact that the Government has recognised the complexity of the task they have set themselves is a positive news, but it will disappoint leaseholders who have been hoping for lower value lease extensions to become a reality. It remains to be seen whether lower premiums will actually be the result of this legislation”
“The announcement that the 2-year rule will be gone in January will be very welcome news. It served no purpose in modern times and merely gave lessees an additional layer of documentation to have to deal with when buying or selling leases”
“The changes to the Right to Manage rules will open up the right for many more lessees to control their own destiny in terms of management and control of the buildings they live in, together with, of course, having responsibility for the proper upkeep and administration of the building itself and the collection of contributions from their neighbours”
You May Also Enjoy
How to Transition from a Fixed-Term Tenancy to a Periodic Tenancy
Housing sales end 2024 on a high, but buyers more cautious about how much to pay for homes as mortgage rates drift higher
£21 million to live on UK’s most expensive street
Breaking Property News 20/12/24
Breaking Property News 19/12/24
