The Leasehold and Freehold Reform Act became law on 24 May 2024. Further secondary legislation required to facilitate the Act will be introduced after the general election and will be determined according to the priorities of the next government.
RICS published this response to the new Act on 29 May 2024.
Information for leaseholders
The valuation of leaseholds for secured lending (sometimes referred to as a mortgage valuation) is a specialist matter, for which RICS would recommend taking the professional advice of an RICS regulated member as well as appropriate legal advice from a specialist solicitor. This may be in addition to the advice sought by the lender.
Aside from the lending, ongoing government reform can mean that there may be particular challenges with extending a lease or undertaking a collective enfranchisement at this time. Please see our web page covering these types of valuations: Leasehold Reform Valuation in England and Wales.
Information for professionals
RICS plans to review the contents of the professional standard linked below in due course to take account of government and regulatory reform of residential leasehold. Valuers should therefore familiarise themselves with the latest position before applying any advice.
The professional standard linked below is intended to support valuers undertaking valuations for secured lending purposes on residential leaseholds in England and Wales. It gives practical advice and highlights key considerations for residential leasehold valuation.
Please note, this document was reissued in May 2023 as a professional standard It was previously published in May 2021 as a guidance note. The RICS standards framework is included in the document.
The standard supplements RICS Valuation – Global Standards (Red Book Global Standards), the UK national supplements effective from 2024 and 2019, and mortgage specification in appendix 10 of the 2014 edition of the latter, as revised in 2015. Please note RICS is currently in the process of updating its UK residential professional standards.
The standard has particular application for valuing diminishing lease terms of less than 80 years remaining, however please note the comments on proposed reform above.
Although the publication refers to the process for lease extension and enfranchisement, it is not a professional standard for undertaking valuations to that end, more information on which can be found here: Leasehold Reform Valuation in England and Wales.
Published date: 01 May 2023