Addressing the House of Commons in the King’s Speech, which signals the formal beginning of each new session of parliament and outlines the priorities for the upcoming session, King Charles said that ministers would 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”.
He added: “Renters will benefit from stronger security of tenure and better value, while landlords will benefit from reforms to provide certainty that they can regain their properties when needed.”
The King added that the government would “deliver a long-term plan to regenerate towns and put local people in control of their future”.
Leasehold Reform Bill
The Leasehold Reform Bill aims to empower leaseholders by making it cheaper and easier for existing leaseholders in houses and flats to extend their lease or buy their freehold.
The bill will also up the standard lease extension term from 90 years to 990 years for both houses and flats, with ground rent lowered to nothing.
The government said that this would ensure “leaseholders can enjoy secure, ground rent-free ownership of their properties for years to come, without the hassle and expense of future lease extensions”.
The bill also says it will remove the requirement for a new leaseholder to have owned a house or flat for two years so they can benefit from the changes and increase the non-residential limit where leaseholders can buy their freehold to 50 per cent.
The bill will improve leaseholder consumer rights, such as making, buying or selling a leasehold property quicker or easier, more transparency over leaseholder service charges, replacing buildings insurance commissions with clearer administration fees, extending redress schemes for leaseholders, scrap the presumption for leaseholders to pay freeholders’ legal costs and grant freehold homeowners on private and mixed tenure estates the same redress rights as leaseholders.
It will also aim to ban the creation of new leasehold homes and consult on capping existing ground rents. However, it is unclear at this point whether this applies to flats as well.
Renters Reform Bill
The Renters Reform Bill aims to support the 11m private tenants and 2.3m landlords in England.
This includes a manifesto commitment to abolish no-fault evictions, ending blanket bans on pets and creating a new Private Rented Sector Ombudsman.
Other measures include strengthening landlord grounds for possession, such as adding new mandatory ground for possession, and stronger powers to evict anti-social tenants.
The bill also aims to create a digital Private Rented Property portal to bring together key information for landlords, tenants and councils.
It will make it illegal to have blanket bans on renting to tenants in receipt of benefits or with children, clamp down on criminal landlords and protect the student rental market.
The bill will also speed up the courts process so landlords can regain possession of their property if a tenant refuses to move out and scrap proposals requiring landlords to meet the EPC C threshold from 2025.