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King’s Speech: ‘Disappointing for existing leaseholders’

Campaigners and commentators have reacted cautiously to leasehold reform proposals put forward in the King’s Speech.

The King took part in his first state opening of Parliament as Monarch yesterday, where he outlined the Government's legislative agenda for the coming months.

The Bill aims to make it cheaper and easier for existing leaseholders in houses and flats to extend their lease or buy their freehold.


It will increase the standard lease extension term from 90 years to 990 years for both houses and flats, with ground rent reduced to £0 and remove the requirement for a new leaseholder to have owned their house or flat for two years before they can benefit from these changes.

There will also be a maximum time and fee for the provision of information required to make a sale such as building insurance or financial records to a leaseholder by their freeholder and more transparency over charges.

Sales of new leasehold houses will be banned but the Government hasn’t gone as far on existing ground rents and has just said it will consult on capping these fees.

Katie Kendrick, founder of the National Leasehold Campaign, said the announcements are a step forward but don’t go far enough.

She said: “There is nothing here to tackle the horrors of high service charges, increasing by way above inflation and freeholders taking commissions from suppliers on routine and major works. 

“We would have liked the speech to have included a ban on leasehold in totality, not just for houses, and a drive for commonhold to be the default tenure for communal living, as it is across the rest of the World. Headlines don’t change anything, it’s action we need to see.”

John Stephenson, a partner at the law firm BDB Pitmans, added: “The legislation is disappointing for those already owning a leasehold house. Unless they can afford to buy the freehold and thus extinguish the ground rent – which can be expensive – they may find themselves continuing to pay ground rent.

“That rate will be capped but the legislation is unclear at what rate and the Government may find itself having to compensate the owners of those ground rents. A consultation will follow shortly, but there is a very real risk legislation will fail to get onto the statute books before the end of this government’s term. There is no short-term respite.”

He said flat owners – who make up 70% of the new homes market – can be forgiven for feeling short-changed, adding: “Whilst legislation will make it possible to extend their lease from the 90 years as now to 990 years and without having to wait for two years after purchase, they will see no other changes to their leasehold arrangements and many of the Law Commission’s recommendations, such as the abolition of marriage value, have been shelved, perhaps on Human Rights Act grounds.

“The promises of fundamental reform to the leasehold system appears to have lost much of its impetus, and that will disappoint all leasehold homeowners.”


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