The Leasehold and Freehold Bill 2023

The Leasehold and Freehold Bill 2023

The recent announcement in the King’s Speech and the government’s introduction of the Leasehold and Freehold Bill 2023 marks a significant stride towards fairer property ownership for leaseholders and will potentially bring transformative changes in the UK property market, particularly affecting leasehold and freehold properties. 

What is included in the new bill?

Whilst the new Leasehold and Freehold Bill needs to pass through parliament, it is highly likely that many, if not all of the following elements will be brought in. 

  • The bill aims to significantly ease the process for leaseholders to extend their leases or purchase their freehold.
  • A notable change is the extension of the standard lease from 90 to 990 years, virtually eliminating concerns for future generations.
  • Ground rent is set to reduce to zero upon lease extension.
  • The bill eliminates the previous two-year ownership prerequisite for lease extensions.
  • It also includes measures to streamline the selling and buying of leasehold properties by setting caps on timeframes and fees.
  • The bill further aims to offer clarity and fairness in service charges.

The Present State of UK Leasehold Properties: Challenges and Shortcomings

The current leasehold system in the UK, prior to the introduction of the Leasehold and Freehold Bill, presents a complex landscape with several inherent flaws that have long been a point of contention among property owners. This section delves into the existing setup of leasehold properties and highlights the main issues that have necessitated reform.

Understanding the Leasehold System

In the UK, leasehold ownership essentially means owning a property for a fixed term, but not the land on which it stands. This system often applies to flats and apartments, with lease terms typically ranging from 99 to 999 years. The leaseholder pays ground rent to the freeholder (landowner) and is subject to various conditions set out in the lease.

Key Challenges in the Current System

Shortening Leases and Depreciating Value

As the lease gets shorter, the property’s value can depreciate, especially when the remaining term falls below 80 years. This can make properties less attractive to potential buyers and lenders.

Expensive Lease Extensions

Leaseholders currently face potentially high costs to extend their leases, often accompanied by complex and time-consuming legal processes. This financial burden is exacerbated by the ‘marriage value’ fee when extending leases with less than 80 years remaining.

Rising Ground Rents

Many leaseholders are subject to escalating ground rents, which can increase over time, on occasion making it difficult to sell or mortgage the property.

Lack of Control Over Service Charges

Leaseholders often have limited say in the management of the building, over service charges and building maintenance. These charges can be opaque and subject to unexpected hikes.

Restrictions and Fees

Leaseholders frequently encounter restrictive covenants and consent fees for making alterations or even subletting their properties, limiting their freedom compared to freehold owners.

The Need for Reform

The existing leasehold framework in the UK presents several challenges that have made the ownership experience less favourable for leaseholders. The introduction of the Leasehold and Freehold Bill is a response to these longstanding issues, aiming to rectify the imbalances and make leasehold ownership more equitable and sustainable.

The Leasehold and Freehold Bill 2023: More Details

The Leasehold and Freehold Bill, building on the Leasehold Reform and Ground Rent Act 2022, introduces several pivotal changes. 

These include the extension of standard lease terms and the reduction of ground rents, significantly benefiting current and future leaseholders. The bill also simplifies the lease extension process by removing the prior two-year ownership condition, accelerating the property transaction process.

A crucial adjustment is the alteration in the percentage of non-residential property allowed in a block for leaseholders to purchase their freehold. This move from a 25% to a 50% threshold accommodates those in mixed-use buildings.

Leaseholder Rights

The bill pledges to enhance leaseholder rights by setting definitive guidelines on transaction times and fees, thereby adding transparency to the process. 

This is a step towards empowering leaseholders, ensuring they are not subjected to arbitrary or excessive charges.

Service Charge Reforms

A significant component of the bill is the reform of service charges. The government seeks to make these charges more transparent and equitable, addressing long-standing concerns among leaseholders about being overcharged.


Should all the proposed elements come to fruition, the Leasehold and Freehold Bill represents a pivotal shift in the UK property sector and will undoubtedly have impact in West London, potentially making property ownership more accessible, transparent, and cost-effective. 

If you would like to discuss your plans to buy or sell property in West London please do get in touch