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Further tenancy reforms are likely to come regardless of which party takes power at the next general election.
The Leasehold and Freehold Reform Bill was rushed through before Parliament was dissolved, abolishing leasehold on new houses but not apartments, and allowing leaseholders to challenge poor practices by freehold owners through a compensation scheme.
However, a ground rent cap, as pushed for by the outgoing Housing Secretary Michael Gove, did not materialise.
The Labour manifesto states: “Labour will act where the Conservatives have failed and finally end feudal tenure.”
“We will enact the Legislative Commission’s package of recommendations on leasehold enfranchisement, management rights and common land rights.”
“We will ban the building of new leasehold apartments and take further steps to make shared tenure the default form of tenure.”
“We will tackle unregulated and unaffordable ground prices. We will act to end unfair ‘squatting’ and unreasonable maintenance costs on private housing estates.”
Meanwhile, the Conservative manifesto states: “We will complete the process of leasehold reform to improve the lives of more than four million leaseholders – by capping ground rents at £250 and reducing them to nominal amounts over time.”
“We will end the abuse of expropriation to ensure that tenants do not unjustly lose their property and capital, and to facilitate the acquisition of common land.”
“The policy objectives that can be read into the manifesto clearly suggest that there will be at least a cap,” said Mark Chick, director of ALEP (the Association of Leasehold Enfranchisement Practitioners) and partner at Bishop & Sewell law firm.
“In a survey conducted earlier this year, ALEP members did not support an outright ban on ground fees, and, as we’ve said before, the proposal to impose a cap rather than an outright ban could be seen as a victory for common sense.”
“For those seeking to implement a ban on ground fees on existing leases, this is likely to be resisted as they will be challenged on human rights grounds. Also, the impact of the graduated cap and an eventual ban or ‘sunset’ clause on the property market will require some time for adjustment.”
“What we do not know at this stage is the appetite on the part of freehold holders to challenge these leasehold reforms, along with the proposed valuation changes that the Leasehold and Freehold Reform Act 2024 will bring.”
“This can only be practically assessed once the relevant compensation rates in the new valuation methodology of the new law have been established.”