Leasehold Reform Deadlock: Leaseholders held hostage by a paralysis of policy

Linz Darlington, Managing Director of Lease Extension Specialists, Homehold shares his commentary, believing that leaseholders are being "held hostage by a paralysis of policy:" 

“Leaseholders have been waiting for years for it to be “cheaper and easier” for them to extend their leases. Following the testimony of Housing Minister Matthew Pennycook in today’s Select Committee, they could be waiting for many more years to come.

“The Leasehold and Freehold Reform Act 2024 was passed in the “wash up” period shortly before the last general election. However, the key provisions relating to lease extensions and freehold purchases have not been implemented.

“Delays in implementation are partly because further consultation and secondary legislation will be required to ascertain how lease extensions and freehold purchases should be priced under this new law.

“Matthew Pennycook’s tone relating to these provisions was notably defensive. He admitted that they could have consulted on these rates as early as September 2024, but stated that 'I have seen people argue time and time again that we’re dragging our feet because we’re not doing the valuation rates consultation and that’s why we haven’t switched on. That’s not the constraint here.'

“Instead, he blamed the delay on a 'small set of serious and specific flaws' that need to be resolved – which he claimed the outgoing Conservative Government were aware of before they passed the legislation.

“Pennycook’s blame of the previous Government is only half correct. If Labour had consulted on the rates promptly, they could have rectified these flaws by adding provisions to housing legislation such as the Renters’ Rights Act 2025.

“The Minister confirmed that he intends to resolve these flaws in the Commonhold and Leasehold Reform Bill – which is still in the pre-legislative scrutiny phase. The practical result is that the implementation of the legislation already on the statute books is being tethered to the fortunes of a bill which has not even been formally included in a King’s Speech.

“It was accepted by the Government that there will likely be further litigation from freeholders on these reforms. When pressed, Pennycook was unable to explain whether the legislation could be implemented while this was ongoing. Instead, he said that 'Our contingency plan would be to robustly contest the legal action – it is about as simple as that.'

“It seems that any of this legislation is unlikely to benefit leaseholders until late 2028 at the earliest, but it could be much, much later.

“For leaseholders to benefit from these reforms, they must actually be implemented – not simply discussed or passed. While implementing elements of leasehold reform independently of each other could be argued to be 'piecemeal', it is better than bundling the issues together into ever more comprehensive, complex and contentious piece of legislation that is never ‘switched on’.

“Leaseholders are being held hostage by a paralysis of policy. They need actual progress and the 'cheaper' extensions they were promised, not more platitudes and political posturing.”