Housing Reform

Housing Reform

● The Government is committed to helping more people to own the home of their dreams. We believe home ownership provides people with greater security to raise a family and live comfortably.

● Alongside the work to improve the regulation of social housing, the Government remains committed to creating a fair and just housing system that works for everyone.

● The Government will be taking forward a comprehensive programme of reform to improve fairness and transparency in the leasehold market.

● The Leasehold Reform (Ground Rent) Act 2022 will come into force on 30 June.

This means that landlords will be prevented from requiring a financial ground rent in most new long residential leases. We will also publish accompanying guidance for enforcement officers and consumers.

● This was the first part of our seminal programme to implement leasehold and commonhold reform in this Parliament. Building on this, the Government remains committed to:

o transforming the experience of leaseholders by making it easier and cheaper for them to extend their lease or buy their freehold, and simpler and quicker to take control of the management of their building;

o better protecting and empowering leaseholders by giving them more information on what their costs cover and ensuring they are not subject to any unjustified legal costs and can claim their own legal costs from their landlord;

o banning new leasehold houses so that all new houses are freehold from the outset other than in exceptional circumstances; and

o delivering a reformed commonhold system as an alternative to leasehold ownership.

● We will continue to work closely with the Competition and Markets Authority as their investigation into mis-selling and unfair terms in the leasehold sector continues. In recent months, the Authority secured commitments from fifteen businesses that had bought freeholds from the housing developer Countryside to remove egregious doubling ground rents terms for their leaseholders and revert charges to original rates. We encourage developers who have not yet engaged with the investigation to do so.

● This is part of a wider housing reform agenda to level up homeownership. We have set ambitious housing missions for renters to have a secure path to ownership and reduce the number of non-decent rented homes. The Government is also supporting more first-time buyers to get onto the housing ladder; has announced the offer to regenerate 20 towns and cities across England; launched a £1.5 billion Levelling Up Homebuilding Fund; is increasing the amount of affordable housing and is also reducing homelessness.

Key facts

● There are around 4.6 million leasehold homes in England, representing almost one in five of the total housing stock.

● The Law Commission’s investigation on how to help existing leaseholders and revitalise commonhold provided a set of recommendations in 2020 for the

Government to consider. They highlighted the need to make the process of lease extensions and freehold acquisitions easier and cheaper, the need to revise the eligibility of Right to Manage and simplify this process, and to re-invigorate commonhold as a workable alternative to leasehold.

● Multiple industry surveys over the last six years have reported major problems with the system, including owners of long leasehold properties unaware of being in a ‘landlord and tenant relationship’ and having different rights to owner occupiers.