King's Speech announces a new Leasehold and Freehold Bill
Rob Poole, Director of Glide (part of Leaders Romans Group) gives his professional views on the new legislation.
Leasehold reform should be widely welcomed – specifically because the intention is to reform rather than replace leasehold.
There has been a lot of noise around replacing leasehold with commonhold but this is unworkable on many levels. With commonhold for large blocks such as those that we manage, dispute resolution is so much more complicated because of the numbers involved, that many disputes may never be resolved. This would be compounded by the lack of a first tier tribunal.
The Government has already done a lot to make things fairer for leaseholders, such as changes to ground rents and the work with insurance commissions. This new Bill provides an opportunity to build on that.
Similarly estate charges should come into focus more as some cases have seen rises in over 140% over the last four years. Homeowners have no mechanism to challenge estate charges in the way that leaseholders can challenge service charges at a Leasehold Valuation Tribunal. This runs the risk that estate charges could push homeowners into poverty in future years.
The proposed lease extension is also welcome, because short leases delay sales, cause chains to break down and consequently contribute to the housing crisis.
While I welcome improvement, I’m conscious that change does not necessary constitute improvement – it is vital that the Government considers all potential changes very carefully and consults widely.