• The Leasehold and Freehold Reform Act 2024 (the Act),

• The government's Commonhold White Paper; and

• The Renters' Rights Bill (the Bill).

These legislative changes are set to radically transform the housing landscape, bringing significant implications for Housing Associations (HA's). The Leasehold and Freehold Reform Act 2024 seeks to empower homeowners and simplify property ownership while Commonhold Reform plans to introduce a viable alternative to leasehold ownership, with the aim of promoting greater transparency and fairness. Additionally, the Renters' Rights Bill aims to enhance tenant rights and security.

1. What are the key legal considerations for HAs under the Leasehold and Freehold Reform Act 2024?

The Act introduces the following important legal considerations:

• Lease Extensions: The Act allows shared ownership leaseholders to extend their leases by adding 990 years to the remaining term, without needing to own the property for two years. HAs must update procedures to facilitate this and inform leaseholders of their rights.

• Ban on Sale of New Leasehold Houses: The sale of most new leasehold houses is banned. New-build houses must be sold as freehold, however, there are exceptions for shared ownership leases.

• Ground Rent Reduction: Ground rents for new leasehold properties are reduced to zero. HAs must adjust financial models and communicate this benefit to buyers, highlighting long-term affordability.

• Legal and Valuation Costs: Charges will be limited for legal and valuation costs related to lease extensions.

• Shared Ownership Leasehold Rights: Shared ownership leaseholders have the same rights and protections as other leaseholders, including lease extensions and reduced ground rents. Sales teams must be knowledgeable about these rights and communicate them effectively to buyers.

At the upcoming conference, we will discuss what provisions are already in force, what changes are on the horizon, and the implementation timeframes for these reforms.

2. How will the Government's proposed transition to Commonhold impact shared ownership properties?

The government's White Paper on commonhold proposes a new model for homeownership, aiming to address issues with the leasehold system. Here are some of the key issues:

• Governance and Management:

• HAs must adapt from acting as landlords to participating in commonhold associations.

• This shift potentially reduces the control HAs currently exercise over shared ownership properties.

• Financial Implications:

• A potential loss of from ground rents and lease extensions.

• A simpler ownership model may boost demand and provide greater predictability in financial planning.

• Mortgage Lender Confidence:

• Commonhold's success depends on mortgage lender acceptance, which has been historically reluctant.

• The government proposes measures to improve lender confidence, such as standardising legal structures.

• Regulatory and Compliance:

• HAs must comply with social housing regulations and commonhold governance requirements. This may require additional training and expertise.

• A more transparent property management system could reduce legal disputes and strengthen tenant engagement through participation in commonhold associations.

In June, we will discuss in detail what commonhold looks like for shared ownership properties and HAs, and explore the practical implications for the Housing sector when commonhold is delivered.

3. How will the Renters' Rights Bill affect Housing Associations?

The Bill introduces several significant changes:

• Abolition of 'No Fault' Evictions: Section 21 evictions are eliminated, requiring HAs to update their eviction policies.

• Introduction of Assured Tenancies: All tenancies will become periodic assured tenancies, replacing assured shorthold and fixed-term tenancies. HAs must adapt their tenancy agreements and practices accordingly.

• New Grounds for Possession: New mandatory and discretionary grounds for possession tailored to the social housing sector.

• Rent Increase Regulations: Rent increases are restricted to once per year, with a minimum notice period of two months. Tenancy agreements must be reviewed to comply.

• Private Rented Sector Ombudsman: A new Ombudsman will resolve disputes between tenants and landlords.

These changes aim to enhance tenant rights and security, presenting both challenges and opportunities for HAs. In June, we will briefly summarise the key takeaway points for HA's.