What does the King’s Speech mean for leasehold reform?

It has been a roller coaster of a year for those tracking leasehold reform.  The dissolution of Parliament following the snap announcement of the July general election saw the Leasehold and Freehold Reform Act 2024 make it to the statute books and today's King's Speech sets the stage for further significant reforms.

The new Government has confirmed its commitment to press ahead and implement the provisions contained in the Leasehold and Freehold Reform Act 2024 that will make it overall cheaper and easier for leaseholders to buy their freehold and increasing the standard lease extension to 990 years for flats or houses.  We await further announcements as to exactly when these provisions will be formally implemented. 

Further reforms now look set to follow, with the King's Speech announcing the publication of a new draft Leasehold and Commonhold Bill likely to include:

• The enactment of the Law Commission recommendations to further bolster leaseholders' rights to buy their freehold by way of enfranchisement and to take over the freeholder's building management functions by way of the right to manage.  Quite what this may entail remains uncertain at present and could pave the way for further significant reforms in addition to those contained in the 2024 Act.
• The regulation of "unregulated and unaffordable" ground rents, picking up where the previous Government left off having put forward proposals for consultation and reform before running out of time to implement as part of the 2024 Act.
• The abolition of the "draconian" concept of forfeiture, that currently allows a landlord to forfeit the lease where the tenant is in breach of its lease including the non-payment of monies under its lease.
• The "reinvigoration" of commonhold as the default form of tenure in place of the current leasehold system and a ban on the sale of new leasehold flats.

The above provisions are to be set out in a draft Bill.  This is significant as the draft Bill will be subject to consultation and scrutiny before it is published, rather than being presented as a fait accompli, whilst this may not please those looking to fast-track significant reforms, it will hopefully allow time for a reasoned analysis of the proposed reforms.

The timescale for implementation of these measures therefore remains unclear. The initial pre-election pledge from Labour was that they would abolish leasehold within 100 days of coming to power, a promise later dropped.  Those that recall the introduction of commonhold in 2002 will be more than aware that in its current form commonhold does not present an immediate or straightforward solution to the perceived problems of the current leasehold regime and it remains to be seen how this and other proposals for reform will progress under the new Government.