Government consults on banning new leasehold flats, ground rent cap, and transition to commonhold

The Government has now opened a consultation in this regard titled “Moving to commonhold: banning leasehold for new flats”.

The consultation forms part of the next phase of leasehold reform and sits alongside the ongoing implementation of the Leasehold and Freehold Reform Act 2024 (‘The 2024 Act’) and the recently published draft Commonhold and Leasehold Reform Bill (‘The Bill’).

This seeks opinions from leaseholders, landlords and managing agents about how the Bill’s proposed ban on new residential leaseholds should be implemented in practice.

Varying residential flat leases

Flat leases often contain defects which one party or the other would like to see changed. This can be a particular problem on resale as lenders continue to tighten their requirements over time.

Such a change would usually be documented by varying the lease via a Deed known as a “Variation”.

Recent case law developments have made lease variations easier in certain circumstances and serve as a useful reminder of the available routes for seeking a variation.

Leasehold Reform (Ground Rent) Act 2022

The Leasehold Reform (Ground Rent) Bill received Royal Assent on 8 February 2022. The main elements of it, i.e. the ground rent restrictions themselves, remained to be brought into force by regulations. This has now taken place; The Leasehold Reform (Ground Rent) Act 2022 (The Act) will come into force on 30 June 2022.