The King’s Speech – more uncertainty for the leasehold sector

On 7^th November, the parliamentary year got underway with the opening of Parliament by the King. Amidst the pomp and pageantry, it is an opportunity for the government of the day to set out its legislative agenda for the year ahead.

Like many practitioners, I found myself transfixed as I watched the latest episode of leasehold reform unfold. Whilst the detail was scant, the subsequent briefing note referenced an interesting insight into the current thinking of government.

Over the past few months, I think it is fair to say that many of us have speculated as to what the latest round of reform might look like.  The death of marriage value, a cap on ground rents, prescribed rates. The list is as long as it is speculative. Still, notwithstanding this, we have been afforded with little more than a legislative wish list, government presumably aware of the huge complexities that lay ahead in implementing reform.

In a step seen by many to be encouraging, the government has immediately launched into an industry wide consultation on the future of ground rent and whether this should be capped or scrapped.  An arbitrary approach, such as we have seen with the BSA, is likely to result in not only a multi-tier market, but also confusion and chaos.  None of which seeks to provide anywhere near the degree of certainty so desperately needed.

Following the Autumn Statement on Wednesday, many political commentators are now speculating as to when the next election might be, with May starting to look like the favoured month.  If we are to assume this will be the case, it feels very likely that the uncertainty will continue for some considerable time to come.