The Government’s ambitious plans to overhaul the leasehold system have sparked a legal backlash from freeholders, including several charitable organisations. With reforms aiming to make leasehold ownership simpler and fairer for homeowners, the proposed changes are now facing serious scrutiny in the courts.
At the heart of the dispute is the Government’s proposal to abolish “marriage value” – a key element in lease extension calculations. Currently, when a lease has fewer than 80 years remaining, the leaseholder must share the increase in property value with the freeholder.
Removing this requirement could significantly reduce the cost of lease extensions for homeowners, but freeholders argue it strips them of a legitimate financial interest.
The reforms also include:
- Capping ground rents
- Making it easier for leaseholders to buy their freehold
- Removing the right of forfeiture
- Replacing leasehold with commonhold ownership in the long term
Freeholders have responded by launching a judicial review, claiming the proposals breach their rights to peaceful enjoyment of property under the European Convention on Human Rights. The outcome of this legal challenge could have far-reaching implications for both landlords and leaseholders.
While some changes – such as removing the two-year ownership requirement before leaseholders can extend their lease – have already come into force under the Leasehold and Freehold Reform Act, many of the more transformative reforms remain under consultation and could take years to become law.
At Spire Solicitors LLP, we understand how complex and uncertain leasehold reform can feel. Whether you’re a leaseholder looking to extend your lease or a freeholder concerned about your rights, our experienced property team is here to help you navigate the changes ahead.
