The King’s Speech Unveils Promising Housing Market Reforms
In a historic moment, King Charles opened Parliament for the first time as monarch, delivering a speech that outlined the government’s priorities for the coming months. Among the 21 proposed laws set to be passed in the next Parliamentary session, two crucial pieces of legislation stand out for the UK housing market: The Renters Reform Bill and the Leasehold and Freehold Bill.
Leasehold and Freehold Bill: A New Dawn for Leaseholders
The Kings’ Speech declared, “My Ministers will bring forward a bill to reform the housing market by making it cheaper and easier for leaseholders to purchase their freehold and tackling the exploitation of millions of homeowners through punitive service charges.”
This announcement marks a significant milestone in the ongoing leasehold/freehold debate, which has garnered attention due to the ‘leasehold scandal.” Many homeowners found themselves trapped in escalating ground rents and service charges after purchasing new-build houses on a leasehold basis.
The proposed bill aims to empower leaseholders by:
• Making it more affordable to extend leases and acquire freeholds.
• Increasing the standard lease extension term to an impressive 990 years.
• Ensuring full transparency regarding service charges.
• Banning the creation of new leasehold homes.
While almost half of all flats in England are currently sold on a leasehold basis, this bill promises to enhance the rights of leaseholders, providing them with greater security and control over their properties.
Timothy Douglas, head of policy and campaigns at Propertymark, emphasises the importance of tailoring legislation to individual circumstances. He notes that while capping ground rents is a positive step, it’s crucial to consider the unique characteristics of each development. Some may require specific service charges to justify ongoing management fees. An essential nuanced approach, that would ensure communal areas and shared spaces are properly maintained.
Renters Reform Bill: Strengthening Security and Certainty
The King’s Speech also announced the continuation of the Renters Reform Bill, which recently received its second reading in Parliament. This bill promises to bring about stronger security of tenure for renters and greater certainty for landlords regarding property repossession.
Key provisions of the Renters Reform Bill include:
• Abolishing no-fault evictions, providing tenants with increased security.
• Introducing stronger grounds for possession, safeguarding landlords’ rights to repossess properties for legitimate reasons.
• Putting an end to blanket bans on pets and restrictions on tenants in receipt of benefits or with children.
These legislative changes promise to create a more transparent and equitable environment for both homeowners and tenants. We look forward to navigating this evolving landscape alongside our clients, ensuring they benefit from these developments. Stay tuned for more updates from Bernards as the bills progress.