The government has long committed to 'fixing our broken housing market' following the Housing White Paper back in February 2017 and since then, the Law Commission has carried out various consultation exercises. In early 2021, we saw the Government announce imminent plans to reform the future of homeownership in England and Wales which had been heralded as the ‘biggest reform to property law in a generation’.
Last week (22 April) we saw the first step in the reform package with The Leasehold Reform (Ground Rent) Act bill announced. The Act will come into force on 30 June 2022 and will put an end to homeowner costs, known as ground rents for new, qualifying long residential leasehold properties in England and Wales. From this date, any ground rent demanded as part of a new residential long lease, cannot be for more than one peppercorn (zero) per year.
In the announcement, Leasehold minster, Lord Stephen Greenhalgh highlighted how the 'important milestone' aims to 'fix the leasehold system and to level up homeownership'.
This is the first of a two-part seminal legislation to reform the system surrounding leasehold property in England and Wales, with the second bill expected to cover a more significant range of issues that will be seeking to streamline the way in which the cost of extending a lease or buying a freehold is valued. It is however yet to be determined when the second stage of the leasehold reform legislation will enter into the statute books.