Clarity is key – ALEP's assessment of the Government’s response to HCLG Select Committee report on leasehold reform

Friday 5 July 2019

The Association of Leasehold Enfranchisement Practitioners (ALEP) has reviewed the Government’s response (published on 3.7.2019) to the Housing, Communities and Local Government (HCLG) Select Committee Report on leasehold reform released earlier this year.

 The Government confirms that it is committed to introducing legislation to reform leasehold law and agrees with many of the Select Committee’s suggestions on how to do this, including:

  • Restricting ground rents on new leases to a peppercorn (zero financial value).
  • Providing clearer information to prospective buyers so they can make informed choices before purchasing a leasehold property.
  • Ensuring estate agents provide ‘clear and transparent’ information about the costs involved in purchasing a leasehold property, with sellers providing an information pack setting out key information such as lease length, ground rent and service charges.
  • Looking at ways to legislate to prohibit the sale of future leasehold houses (unless there are exceptional circumstances).
  • Supporting the increased use of commonhold for it to be a ‘viable alternative’ to leasehold, subject to the Law Commission's report on this.
  • Introducing a standardised ‘key features’ document which aims to provide clear guidance about a lease.
  • Considering the introduction of a right of first refusal for leasehold homeowners if the freehold is to be sold.

Commenting on the response, ALEP Director John Midgley, said: 

“It is encouraging to read that the Government’s response focuses on improving clarity, fairness and transparency for leaseholders and freeholders. We await to see the Government’s approach to the whole leasehold enfranchisement process once the Law Commission has concluded its detailed review.

“ALEP’s member organisations work with freeholders, leaseholders and managing agents. Members await and will generally welcome reforms that make the whole leasehold enfranchisement process smoother for all concerned.”