The Commonhold and Leasehold Reform Bill – can property experts point out some negatives

The government have taken the first steps to addressing the unfairness in the leasehold ownership structure. However, service charges is what cause most lease holders the biggest problem and this is the issue that needs most addressing, especially following the cladding crisis. This will make investment in freeholds a thing of the past.

Typically, most pension funds have their largest exposure to more secure investment of which often consists of commercial property and residential freeholds. Commercial property has seen a huge hit in recent years as the highstreet evolves and businesses transition to flexible working. Now residential freeholds will be hit in a big way. Ground rent is considered guaranteed income to the investment holder for life which will now all but disappear. The transition from leasehold to freehold will also mean the absence of premiums to extend leases. Again something that has been built into investment income. This feels like it could be catastrophic for pension holders up and down the country