Extending a flat lease or buying the freehold – where we are now (or rather – where we aren’t).

It was all over – or that’s what we thought when the Prime Minister announced the election date.

The Leasehold and Freehold Reform Bill was progressing through the House of Lords with strong arguments on both sides, but the Bill was very far from the finished article.  When the election was called, it was bound to be scrapped, along with the Renters Reform Bill.  However, to widespread surprise, the Bill made “wash-up” and at the very last minute received Royal Assent just as Parliament was prorogued.  That Friday afternoon, before Parliament closed down, the final House of Lords debate made for exciting viewing.  The Lords had been far more critical of the proposed Bill than the Commons, but that afternoon, one peer after another from all sides of the House, tore into the Bill.  One peer for example, (Lord Robathan – Con) described the Bill as “not decent or fair, half-baked and half thought out and there will be huge problems in the future….in fact….. chaos”.

Despite the opposition in the House of Lords, the Bill passed – and so now we have the Leasehold and Freehold Reform Act 2024, or LAFRA as it is being called.

Much has been promised to leaseholders in the Act with regard to reducing the cost to extend a short lease or buy the freehold.  However the question has to be asked by leaseholders – is it just too good to be true?  We don’t have all the details yet, but it looks as if leaseholders might now expect a gift, in some cases, of several hundreds of thousands of pounds, possibly millions even in the most expensive properties in central London, all at the expense of the freeholder.  Is this really what Government intended?