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Following the Queen’s Speech delivered on 10 May 2022, it should come as no surprise that the proposed reforms to ground rent were not referenced. This is largely because the new Leasehold Reform (Ground Rent) Act 2022 will become law on the 30 June 2022. You may recall from our previous update on this subject that this piece of legislation will seek to ban the future creation of ground rents from 30 June 2022. It will be a significant milestone for those engaged in reform and a much more seismic shift in practice for those specialising in landlord and tenant matters. Many had expected to see reference in the speech to the Government’s next raft of reform. However, there was nothing to be seen, other than a small reference buried away on page 69 referring to the Government’s continued commitment to reforming the leasehold sector. Many have speculated that events on the world stage and at home may force the Government to rethink the timetable for reform. For now, it really remains something that exists at consultation level only. Whether we will get to see a bill in the future very much remains to be seen. Landlords and tenants alike need to be mindful of the law as it stands today and not what might be promised in the future.
The speech touched on improving the regulation of social housing and the Social Housing Regulation Bill but nothing specific to leasehold reform. So what does this really mean for the market and for landlords and lessees? Well, it suggests in the first instance that there was a need for clarity. For some time now, the market has been awaiting the promise of future reform and an explanation of the extent to which this might impact the status quo. Whilst not suggesting that the current inertia is a positive, the fact that specific reform is not yet quite ready does at least allow landlords, lessees and practitioners alike to continue operating under the law as it sits at the present time.
For now, reform for now remains on the horizon. However, it is coming and we will continue to do everything we can to support our clients during these uncertain times. We will remain vigilant about the possibility of new legislation being passed – and this could happen at any time.
The Leasehold Reform (Ground Rent) Act 2022 coming into force will mean a busy start to the summer for many of us. However, we are certain that, by the end of the year, we will all have become much more accustomed to another “new normal”.
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