Leasehold Bill the first step in addressing challenges facing homeowners in the UK - Palmers Solicitors

Leasehold Bill the first step in addressing challenges facing homeowners in the UK

Leasehold Bill the first step in addressing challenges facing homeowners in the UK

Currently at Committee stage in the House of Lords, the Leasehold and Freehold Reform Bill aim to offer enhanced protections for homeowners of leasehold properties – but campaigners are calling for further intervention.

The Bill would outlaw the creation of new leaseholds on houses and flats, as well as making it easier for leaseholders to purchase the freehold on their homes.

However, many argue that there needs to be support for existing leaseholders, including those who face increasing ground rent and other costs which are seeing some being threatened with eviction.

Our property law expert, Carey Jacobs, addresses the challenges facing many leaseholders in the UK and what needs to be done to support them in the long term.

How do leasehold properties work?

“When many people think of leasehold properties, they think of rental units,” said Carey.

“However, a decent number of owner-occupied properties are leasehold, most of these flats or apartments. Individuals or families own the unit in which they live but not the ground or the communal spaces within the building, which means they are still liable for ground rent.”

As a result, leaseholders may face higher costs than freeholders in similar properties.

When this leaves leaseholders unable to meet high rental costs or unwilling to due to rising rates, the freeholder can threaten to take possession of the property through the Courts if there is a breach of lease.

Enhancing protections

Leaseholders only need to owe a relatively small three-figure sum in order for freeholders to apply for repossession, although many are faced with far higher debts when they are unable to cope with rising costs.

“Additionally,” said Carey, “leaseholders often find themselves paying outstanding costs before the proceedings reach the Courts, despite finding costs unreasonable.

“It would be highly beneficial for leaseholders to have more protections in place over the significant investment they have already made in purchasing a property.

“From our perspective, it will be interesting to see where legislation around leasehold properties takes the residential property field and how this will impact the needs of homeowner clients in the coming years.”

For advice on leasehold properties and changes to leasehold legislation, please contact our Residential Property team today.