Introduction

The UK government has proposed significant changes to leasehold ownership. These reforms aim to reduce costs, increase transparency, and shift new property ownership towards commonhold. Whether you are a leaseholder or investor, understanding these reforms is critical.

1. Ban on New Leasehold Flats

New leasehold flats may be replaced with commonhold ownership, meaning:

• Buyers own a share of the building and land directly.
• No freeholder controlling your property.
• Lease extensions become cheaper and easier.

2. Service Charge Transparency

• Government aims to crack down on hidden fees and secret insurance commissions.
• Leaseholders will have greater transparency and oversight.
• Existing leaseholders may find it easier to buy the freehold, giving them more control.

3. Impact on Existing Leaseholders

For current leaseholders:

• Extending leases becomes simpler and more affordable.
• Freeholders must be more transparent about charges.
• More control over property decisions and costs.

4. Potential Effect on Property Values

The reforms could have mixed effects:

• Scrapping new leaseholds might reduce the value of existing leasehold properties.
• Lower costs and greater control could increase value for some leaseholders.
• Investors and homeowners should carefully assess market impacts.

Next Steps & Considerations

• Stay informed about proposed legislation changes and timelines.
• Review your lease and understand potential impacts on fees and ownership.
• Consider consulting property professionals to evaluate the effect on investments or purchases.

Tip: Even though these reforms are proposals, being prepared helps you adapt quickly when changes come into effect.