The Leasehold and Freehold Reform Act was rushed into law on Friday, as part of the “wash up,” which allows legislation to be passed quickly, before the 4 July election. 

The debate in the House of Lords lasted 11 minutes and passed 67 amendments to a sprawling bill that includes 124 clauses.  

At its most basic, the legislation bids to make it cheaper and easier for people to extend their leases, buy their freeholds and take over the management of their buildings.  

UK minister for housing and planning Lee Rowley called the Act “the most consequential property reform for decades”.  

But others in the property industry point out that a bill passed at such speed will inevitably leave out contentious measures, and may set in train a series of unintended consequences.    

Cavendish Legal Group partner Jonathan Frankel said: “Parliament rushed it through and watered it down.”   

Frankel adds: “While consultations for leasehold reform started back in 2017, the process has been slow.   

“One of [housing secretary] Michael Gove’s clear objectives was always that ground rents should be a thing of the past – he pledged to reduce them to ‘peppercorn’.”  Here are key measures of the bill:  

What’s in the leasehold bill:  

• Lifts the standard lease extension term to 990 years for houses and flats — from 50 years in houses and 90 years in flats  
• Sets a maximum time and fee for home buying and selling information for leasehold properties  
• Gives leaseholders greater transparency over their service charges by making freeholders, or managing agents, issue bills in a standardised format  
• Makes it easier and cheaper for leaseholders to take over management of their building, allowing them to appoint their own managing agent  
• Extends access to claims schemes for leaseholders to challenge poor practice  
• Gives homeowners on private and mixed-tenure estates a greater ability to challenge the charges they pay  
• Bans the sale of new leasehold houses so that, “other than in exceptional circumstances”, every new house in England and Wales will be freehold from the outset  
• Remove the requirement that a new leaseholder should have owned their house or flat for two years before they can extend their lease or buy their freehold  
• Lifts the “non-residential limit” to allow leaseholders in buildings containing 50% non-residential floorspace to buy their freehold. This rises from 25%.  

What’s not in the leasehold bill:  

• Ground rent remains for existing leaseholders — it has not been cut to a “peppercorn” rate, or capped at £250, as the government had signalled in recent months  
• No ban on the forfeiture of long residential leases, which can allow a freeholder to repossess a flat for a debt of £350  

Although the bill has been passed into law, key measures will not come into force for up to two years as various rates and thresholds still have to be set by the incoming government.  

Homehold managing director Linz Darlington said: “These included-but-delayed changes include banning leasehold houses, and also abolishing marriage value which could make it cheaper for leaseholders with fewer than 80 years left to extend their leases.  

“Instead, we will have to wait for additional legislation to fill in the gaps — and the bill’s impact assessment suggests this won’t be in place until 2026.   

“This secondary legislation – which will set the key rates used to calculate lease extension and freehold purchase prices – will also have the potential to make lease extensions more expensive for those with leases above 80 years and lower ground rents.”  

Rather than an ending, this bill is a beginning, with much still to play for between leaseholders and freeholders.  

National Residential Landlords Association senior campaigns and public affairs officer Eleanor Bateman said: “Whether it makes it ‘cheaper’ to extend a lease will depend in part on secondary legislation that won’t be passed until after the election.”  

Bateman added: “We have particular concerns about the impact on leaseholders if reforms to ground rent result in freeholder insolvency, and we urge whoever forms the next government to resolve the issue of non-qualifying leaseholders before implementation.”  

Ami chief executive director Robert Sinclair pointed out: “To get the bill through, it’s been emasculated to a greater degree than anyone would have wanted. While it will do something, it will do very little to change the genuine framework of how things operate.”

“There are still ongoing concerns about leasehold contracts, servicing clauses, and escalation clauses in terms of costs, which need to be addressed and will possibly be addressed to the Competition and Markets Authority.”