On 24 May 2024, the Leasehold and Freehold Reform Act (“LAFRA”) was the last Bill passed in the current Parliament. It was pushed through the Commons at speed to ensure it received Royal Assent before Parliament was prorogued.
However, it's worth pointing out that LAFRA is not yet in force.
Some parts of LAFRA will come into force next month i.e. those that amend the Building Safety Act 2022 and those that deal with rent charge arrears but the remainder needs to be commenced by the Secretary of State via statutory instrument and, as Parliament is now in purdah, this responsibility will fall to the next Government.
Exactly when the next Government will do this is difficult to predict but it is pleasing to note that leasehold reform features heavily in the manifestos of each of the three main political parties, all of which were published last week.
Here is a summary :
Liberal Democrats:
"Liberal Democrats are committed to tackling these housing failures head-on by…:
- Abolishing residential leaseholds and capping ground rents to a nominal fee, so that everyone has control over their property."
- This is the most leaseholder-friendly manifesto - suggesting that the Liberal Democrats will go much further than LAFRA.
Conservative and Unions Party:
“We will complete the process of leasehold reform, to improve the lives of over four million leaseholders. We will cap ground rents at £250, reducing them to peppercorn over time. We will end the misuse of forfeiture so leaseholders don’t lose their property and capital unfairly and make it easier to take up commonhold.”
- This appears to acknowledge that LAFRA was rushed through and suggests that the Conservatives are committed to “completing” the process of leasehold reform by dealing with the omissions in LAFRA that relate to the ground rent cap, forfeiture and commonhold.
Labour Party:
“Labour will act where the Conservatives have failed and finally bring the feudal leasehold system to an end. We will enact the package of Law Commission proposals on leasehold enfranchisement, right to manage and commonhold. We will take further steps to ban new leasehold flats and ensure commonhold is the default tenure. We will tackle unregulated and unaffordable ground rent charges. We will act to bring the injustice of ‘fleecehold’ private housing estates and unfair maintenance costs to an end. ”
- This confirms Labour's commitment to continue with the process of leasehold reform, and again suggests that they would go much further than the proposals set out in LAFRA - implementing all of the proposals recommended by the Law Commission.
It does seem that the passing of secondary legislation to bring LAFRA (and more?) into force is likely to be high on the next Government’s agenda - this something that will certainly be welcomed by the industry, as this period of limbo benefits no-one.
However, the policies are frustratingly vague and at this point, we are really still none the wiser as to the likely timescale for enactment.
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