What's happening with leasehold reform?

The government is making significant strides to overhaul the leasehold system in England. These reforms aim to make homeownership fairer and more transparent for millions of leaseholders. The details include:

• The Leasehold Reform (Ground Rent) Act 2022 came into force for most new leases on 30^th June 2022. This act effectively ends ground rents for new, qualifying long residential leasehold properties in England (and Wales)
• The government has committed to banning the sale of new leasehold houses, except in exceptional circumstances
• There are plans to give leaseholders the right to increase the standard lease extension term to 990 years with ground rent reduced to zero financial value, upon payment of a premium

When will these changes take effect?

While some changes are already in place, others are still in the pipeline:

• The ban on ground rents for most new long residential leases is already in effect as of 30^th June 2022
• The government aims to bring forward a Leasehold and Freehold Reform Bill to implement more comprehensive reforms
• The exact timeline for all reforms is not yet set in stone, but the government has expressed a commitment to implementing these changes as soon as parliamentary time allows

What does this mean for landlords?

As a landlord, these reforms could impact your property investments in several ways:

• If you're considering purchasing new leasehold properties, they will come with ground rent reduced to zero financial value, potentially affecting your investment calculations
• The proposed right for leaseholders to extend their lease extension terms to 990 years could significantly increase the value and attractiveness of leasehold properties
• The ban on new leasehold houses may limit certain types of property investments in the future

Get in touch

For more advice and guidance on how this reform might affect your investment, contact our local lettings experts below.