Labour just gave crumbs to desperate leaseholders: a ‘drop in the ocean’

In November 2024 Labour Party housing minister Matthew Pennycook made the promise to leaseholders. It was that he would put into force a part of the Leasehold and Freehold Reform Act 2024 by the end of this month.

On Wednesday 22 January he finally fulfilled this – posting on X (formerly Twitter) that he has signed a regulation removing the requirement for a flat owner to have owned a flat for two years before they can extend their lease.

However, one expert has described his actions as a ‘drop in the ocean’ over what’s actually needed.

Leaseholders: still being messed around by Labour

The Leasehold and Freehold Reform Act 2024 was the last bill to be passed before the general election, having received support from both parties. Over six months have passed. While the provisions relating to lease extensions being enabled is welcome, those around freehold purchases and other measures are still not in force.

It is estimated that hundreds of thousands of leaseholders are waiting for this legislation to be fully turned on and make good on its promise to make it “cheaper and easier” for them to extend their lease. In the meantime, many of these homeowners will be stuck in properties that they cannot sell or remortgage.

The government has now said that they will launch yet another consultation, on how to set the valuation rates which will define whether lease extensions become cheaper or more expensive. Frustratingly, they are delaying this consultation until “next summer”, and then have conceded that further legislation will have to be passed to put it into effect.

Linz Darlington, MD of lease extension specialists Homehold, said of Pennycook’s announcement:

The Housing Minister has today signed the regulations implementing the first part of the Leasehold and Freehold Reform Act 2024 that affects lease extensions and freehold purchases.

According to the Housing Minister’s post on X (formerly Twitter), from the end of this month a leaseholder will no longer have had to own their property for two years before they can extend the lease of their flat or purchase the freehold to their house.

While this is a welcome development, removing the ownership condition is a drop in the ocean in terms of what is needed from leasehold reform. It is a small change which will benefit a small proportion of leaseholders.

We estimate that hundreds of thousands of leaseholders are waiting for the more significant changes to the lease extension regime which have been promised to make it “cheaper and easier” for them to extend their leases.

Commitment is needed- now

The Leasehold and Freehold Reform Act 2024 has already set out these changes but they are not yet in force.

Despite this legislation receiving Royal Assent in May 2024 – now eight months ago – the government intends to run a further consultation on some of the important provisions. They don’t intend to run this consultation until the Summer, and this creates a further delay which is unwarranted and unwelcome.

Darlington summed up:

For leaseholders waiting for leasehold reform, they have now had successive governments promise reforms which always seem tantalisingly close, but never actually seem to arrive.

We need the Labour Government to bring forward the consultation, and commit to swiftly implementing the legislation.

Featured image via the Canary