January 2025 – Leasehold Reform Act 2024 Update

The housing secretary, Angela Rayner, has confirmed in front of a committee that the government still has an intention to bring in the Leasehold reform legislation later in the year.

She was questioned by the housing communities and local government committee on Tuesday.

She said “we want to do that within this year – bring forward the legislation”.

This follows the housing minister, Matthew Pennycock, who advised that the government would be publishing a commonhold white paper and starting a consultation on banning Leasehold flats within months.

It appears that the government is looking to make commonhold the default tenure for new build flats however they have said this before and commonhold remains a very limited way to flat ownership despite it being accessible for a number of years.

Angela Rayner said that there were large gaps within the leasehold reform bill which were complex. The government has previously stated they would remove the “two year rule” which means that leaseholders on purchasing a flat would not have to wait two years before extending their lease or go through the relatively complex procedure of having a previously served section 42 Notice assigned to them.

Rayner said that the government wants to move forward at pace but to ensure there are no unintended consequences of the legislation. She discussed commonhold and the ban on leasehold houses in the new legislation but admitted that this did not include flats and she quoted “so there is importance to making sure that we are able to influence that legislation and bring commonhold as the default position close be“.

The proposals by Rayner did not mention or discuss the two year rule or the elimination of marriage value or discussion of deferment and capitalisation rates. These matters may well follow but they were noticeable by their absence.

The government will also be aware of the storm clouds gathering in the form of Legal challenges to the legislation which will have a very large impact on portfolios across London and the whole of the UK including those pertaining to pension funds which will affect the very people the government are looking to help.

More updates will follow as the news unfolds.