Government announces consultation on leasehold reform in 2022

Specialist lease extension solicitor, Callie Tuplin, comments on the Government’s January 2022 leasehold reform consultation announcement.

The Government’s most recently announced consultation on leasehold reform does not touch on the ‘big’ issues.

On 11^th January 2022, the Government made a further announcement regarding leasehold reform, namely a six-week-long consultation allowing property owners and the property industry to provide opinions on specific areas of leasehold reform originally recommended by the Law Commission back in 2020. The six-week-long consultation opened on 11^th January 2022.

Those issues which are considered by many leaseholders and commentators to be the greatest issues of concern – removal of ‘Marriage Value’ and setting of a standard calculation to determine premiums – are not among the issues upon which the consultation is focused. This does not necessarily mean that these matters will not be dealt with in any forthcoming Bill of proposed further leasehold reform. It could simply mean that the Government considers it has already adequately consulted property owners and industry on these matters, unlike those matters considered within the 11^th January 2022 consultation.

Those issues upon which opinions are sought by the Government in this consultation include:

• The non-residential threshold for the right to collectively enfranchise,
• The non-residential limit for an individual freehold acquisition,
• The non-residential threshold for claims aimed at acquiring the right to manage,
• Introduction of mandatory leasebacks as part of collective enfranchisement claims,
• Commonhold voting rights in shared ownership properties,
• Provision of information during the sale of a commonhold property.

The above matters are linked to the Government’s aim of increasing the number of leaseholders who qualify for statutory rights under legislation covering leasehold property and the owners of leasehold property. The proposed reform aims to give leaseholders more power as well as make the process of acquiring a freehold more affordable. The Government’s consultation also seeks further opinion on matters concerning commonhold, a form of property ownership which is currently rare but which the Government has a vision of becoming widely adopted and a more suitable alternative to leasehold property ownership.

Within the 11^th January press release announcing the launch of the consultation, the Government reinforces its expectations for the Leasehold Reform (and Ground Rent) Bill to become law in 2022. The Bill received Royal Assent on 8^th February 2022 and is expected to commence within six months of Royal Assent.

Referring to the Bill, the press release remarks:

“Thousands of future leaseholders are already set to benefit from the first of the Government’s reforms to the leasehold system, expected to take effect later this year…”

You can click here to read more about matters concerning leasehold reform in 2022.