Introduction

Here at XSell, we provide expert advice to leaseholders seeking to buy out the ground rent terms of their property leases. We specialize in negotiating buyouts for leasehold properties burdened with high or onerous ground rents, ensuring a smoother and more beneficial process for our clients. Our expertise in this niche area often leads freeholders to approach us directly, allowing us to negotiate on behalf of leaseholders at no cost to them. This update on the 2024 Leasehold and Freehold Reform Bill highlights the changes introduced by the legislation and underscores our services in helping leaseholders navigate and negotiate the buyout of their lease terms effectively.

Leasehold and Freehold Reform Bill 2024 - Update

We are pleased to announce that the Leasehold and Freehold Reform Bill has completed its passage through the House of Lords, receiving Royal Assent on May 24, 2024. However, implementation of its provisions is not expected until late 2025 or early 2026.

A significant point to note is the absence of any form of cap on ground rent or provisions allowing current leaseholders of apartments to escape onerous ground rent terms.

Summary of Key Changes:

• No Restriction on Ground Rent

  Despite a government consultation in November 2023 aimed at addressing ground rent levels on existing leases, the final bill did not include any cap on ground rent.

• Banning the Sale of Leasehold Properties with Ground Rent

  Effective from June 30, 2022, the Leasehold Reform (Ground Rent) Act 2022 bans the sale of new leases that include ground rent.

• Removal of Marriage Value

  The removal of marriage value significantly reduces the cost of extending leases for properties with terms below 80 years.

• Longer Lease Extensions for Flats and Houses

  Qualifying leaseholders can now obtain 990-year lease extensions at peppercorn ground rent, replacing the previous 50-year extensions for houses and 90 years for flats.

• Rights to Buy the Freehold of Houses

  Leaseholders can now buy the freehold of their houses without needing to own the property for more than two years.

• Greater Transparency Over Service Charges

  Managing agents are required to produce bills in a standard format, making costs easier to scrutinize and challenge. They must also provide yearly reports detailing planned works to avoid surprise costs.

• Changes to Building Insurance Costs

  Managing agents can no longer receive commissions for arranging building insurance and can only charge transparent administration fees.

We are here to help leaseholders navigate these changes and assist in negotiating the buyout of their lease terms effectively.