Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, what recent progress he has made on bringing forward legislative proposals on leasehold extension and commonhold reform.

The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service. We are taking forward a comprehensive programme of reform to end unfair practices in the leasehold market.

We will reform the process of enfranchisement valuation that leaseholders must follow to calculate the cost of extending their lease or buying their freehold. The Government will abolish marriage value, cap the treatment of ground rents at 0.1% of the freehold value, prescribe rates for the calculations at market value, and introduce an online calculator.

Through our reforms, the length of a statutory lease extension will increase to 990 years, from 90 years (for flats) and 50 years (for houses). Leaseholders will be able to extend their lease with zero ground rent on payment of a premium. Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’.

Having closely reviewed the Law Commission’s report on Commonhold, we will establish a new Commonhold Council as a partnership of industry, leaseholders and Government that will prepare homeowners and the market for the widespread take-up of commonhold. This will take time and close working with consumers and industry, and the Commonhold Council will be the critical first step.

The Government will respond to the Law Commission’s remaining recommendations on enfranchisement, commonhold and right to manage in due course. The Government will also ban the sale of new leasehold houses, give freehold homeowners equivalent rights to challenge unfair charges, and close loopholes to prevent unfair evictions.

We will translate these measures into law as soon as possible, starting with legislation to set ground rents on newly created leases to zero in the upcoming session. This will be the first part of major two-part legislation to implement leasehold and commonhold reforms in this Parliament.