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The UK government has pledged to revamp the leasehold system for private property by the close of this Parliament. A new default way of owning property – known as “commonhold” – is to be implemented, so that a lease will not become invalid in time. A ground rent owned by the freeholder will no longer be required. The change follows complaints calling for the government to provide support for existing tenants who were in exploitative tenancies.
While leasehold campaigners welcomed the government’s announcement, many worry that current tenants suffering from unfair conditions will receive little assistance. Any plan by the government to act “as quickly as possible” is unlikely to meet the needs of tenants facing bankruptcy, according to the founder of the National Leasehold Campaign.
Housing Minister Matthew Pennycook has outlined a timetable for the reforms. Under the Leasehold and Freehold Reform Bill, the two-year rule forbidding a leaseholder from extending their lease or purchasing their freehold for the first two years is to be abolished from January. From spring, more leaseholders in mixed-use buildings should be able to manage their tenancies, with no need to pay their freeholder’s costs in the case of claims made against them. By the end of 2021, a replacement programme to forbid any new leaseholds will be outlined, following a public consultation.
Ministers will consult on ways to allow leaseholders to resist unreasonable service charges, and to require that landlords get court approval prior to passing their legal costs on to tenants. Existing flats will also be converted into commonhold. However, not all 2024 bill proposals will be implemented, as the government has identified flaws in the plan that prevent certain provisions from operating as intended.
There are roughly five million leasehold properties in Wales and England. Tenants have reported high ground rents, unreasonable service charges and problems repairing properties. The government aims to provide more than a million private tenants with new rights, including the ability to prevent rogue landlords from obtaining a landlord’s licence
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