As a Professional Services Director at Eightfold, I wanted to share the latest updates on the Leasehold Reform Act 2024, which has recently received Royal Assent. This landmark legislation is a significant victory for leaseholders, introducing several key changes that will benefit homeowners across the UK.
Longer Lease Terms and Easier Enfranchisement
One of the most notable changes is the increase in the standard lease extension term from 99 years to 990 years. This means that leaseholders can now enjoy longer-term security and stability, reducing the uncertainty and anxiety associated with leasehold ownership. Additionally, the requirement for leaseholders to have owned the property for at least two years before qualifying for a lease extension or purchase of a freehold has been lifted, making it easier for new homeowners to access these rights.
Removing Marriage Value and Other Key Changes
The Act also removes the "marriage value" from the premium calculation for lease extensions, making it cheaper and more accessible for leaseholders to extend their leases. Furthermore, the requirement for leaseholders to pay for freeholder costs when exercising their right to enfranchise has been abolished, ensuring that each party bears their own costs.
Increased Transparency and Accountability
The Act promotes increased transparency and accountability by introducing standardised formats for service charges, buildings insurance commissions, and management fees. Freeholders or managing agents must now belong to a redress scheme, providing a mechanism for leaseholders to resolve disputes and seek redress. The Act also bans the sale of new leasehold houses, except in exceptional circumstances, protecting homeowners from unfair practices.
RICS Welcomes the Changes
The Royal Institution of Chartered Surveyors (RICS) announced that they welcomed the measures in the Act to grant 990-year leases, acknowledging the importance of clarity around valuation requirements. As the Act is implemented, it is crucial that landlords and tenants have a clear understanding of the valuation requirements to ensure a smooth transition.
Conclusion
The Leasehold Reform Act 2024 is a significant step forward in promoting fairness and transparency in the leasehold sector. As a Professional Services Director at Eightfold, I am excited to work with clients who will benefit from these changes.
Whether you are a landlord or tenant, it is essential to understand the implications of this new legislation and how it will impact your property ownership or investment. If you have any questions or concerns about the Leasehold Reform Act 2024, please do not hesitate to reach out to our Professional Services team here at Eightfold Property at professional@eightfold.agency, or on 020 3995 4475.
At Eightfold, we are committed to staying ahead of the curve and providing expert advice on all aspects of property ownership and management. For more information on how our services can benefit you, please visit our website or contact us directly.
For further reading on the Leasehold Reform Act, see the RICS website
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