Oury Clark partners lay out how new UK property rules reshape renting, leaseholds and development in 2026 and beyond.

### About this episode

Three major UK property reforms land at once — renters’ rights, leasehold reform and commonhold — and Jemma and Michael from Oury Clark explain why these shifts change timelines, cashflow and asset planning for founders far more than headlines suggest. The tension: clearer protections for tenants and leaseholders versus increased friction and uncertainty for landlords and developers.

They walk through how notice periods, court delays, marriage value abolition, 990‑year extensions, business rates and proposed rent review bans really operate in practice. Founders get a practical read on what to plan, what to expect and what to avoid.

### About the guest

Jemma Hotter and Michael La Fuente are partners at Oury Clark, advising UK and international businesses on property, commercial and regulatory matters. They specialise in translating complex UK real estate rules into practical decisions for founders, investors and operators.

### Key moments

- [00:00] — Why three reforms hit the UK property system at once.

- [02:53] — How renters’ reform redistributes power between landlords and tenants.

- [07:00] — Why four‑month notices and court delays reshape landlord cashflow.

- [09:57] — New restrictions on discrimination, deposits and bidding wars.

- [14:50] — Why yearly rent reviews may trigger annual increases, not stability.

- [18:04] — Leasehold explained: value, mortgages and the 80‑year cliff.

- [27:00] — How 990‑year extensions and scrapping marriage value change pricing.

- [36:05] — Ground rent caps and who loses out when premiums disappear.

- [43:01] — Commonhold: how it works, why it never took off and what changes next.

- [52:00] — Business rates overhaul and what multipliers actually mean.

- [59:02] — Commercial rent reviews and the push to end upwards‑only clauses.

- [01:05:43] — Winners, losers and the unintended effects across the market.

### Mentioned in this episode

- **Doomsday Book** — Historical reference when discussing 999‑year terms.

- **Metro / Evening Standard** — Examples of media reporting on rental pressures.

- **Valuation Office Agency** — Body calculating rateable values.

### Find the guest

LinkedIn: https://www.linkedin.com/company/oury-clark

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• 🎧 Business Without BS — straight talk from people who've actually built things.

Welcome to business without BS today.

No hype, no politics, just reality.

Because we have got three major reforms.

I understand there may even be more, all in the UK property world.

We're talking about the renters, leaseholders and common hold.

The entire UK property market is being fundamentally reshaped.

The headlines, I guess, sound great, fairer, simpler, more transparent.

But property is a system.

When you pull one lever, everything else moves.

So what actually happens next?

So to break it down, I've got Gemma Hotter and Michael La Fuente, both partners here at Uri Clark and wonderful people they are too.

So let's get into it.

What is actually happening here, Gemma?

I mean, I. I'm lost.

Let's zoom out.

We've got three different reforms.

I think you said there were six.

Yeah, there's so many, honestly.

So we probably haven't had that many property changes in over 50 years.

Yeah, they couldn't handle all of these property changes.

Don't tell me you're retiring.

I mean, you know, fortunately they're coming in, you know, slowly.

Yeah.

So, you know, there's time to get our heads around things and to plan and prepare.

So hopefully there's not going to be a massive exodus of the lawyers that most people love, property lawyers, you know.

But yeah, there's been so many recent changes.

So we've got the Renters Reform act, which we'll talk about in further detail.

But that's a big change for those, those renters in the.

Well, actually both in the private sector and in the public sector, we've got the Leasehold and Freehold Reform act, which is all about changing.

So the way the people own their properties, a lot of them will own their property, especially if it's a flat, as a leasehold.

So they'll have a 99 year lease or 125 year lease and then you can go extending that.

You have a right to extend that.

All of that is changing as well, the whole process.

And then the other big change is known as the Common hold and Leasehold Reform Bill.

Now that was actually brought into that bill has been around for quite a while, but that is effectively about entirely changing the leasehold, that long leasehold system in the UK to a system more akin to how flats and properties are dealt with, say in Australia, New Zealand, most other countries, it's more Popular overseas.

We'll get, we'll get into all of these.

They're all, they're all rabbit holes.

Yeah, they're all quite, quite.

Yeah.

In depth.

And they all are separate.

They're all separate.

Okay.

But the cumulative effect has quite an impact, I would say, especially on, on landlords.

And Michael, if you had to try and summarize the direction of travel in one sentence, what was the government really trying to do here?

It seems to be a redistribution of power from, or perceived power from landlords to tenants to try and strengthen the tenant's position, certainly in respect of its occupation of a rental property, its residence perhaps, and make it in their opinion, fairer for that tenant, whether that's at the expense of landlords opportunities or an ability for it to deal with its property in a particular manner.

Those may well be the unintended consequences.

But it seems to me certainly that what the government is trying to do is make it, in their words or their eyes, a fairer system.

So let's start with one.

Yeah, so we're going to start with the renters reform.

Yep, the renters reform.

Okay.

Well, the renters rights bill, I think, yeah, it's probably the best place to start.

And is it fair to say that this is going to be giving tenants more security and landlords less flexibility?

It will give the tenants the comfort of knowing that they cannot be removed from that premises other than if they are in breach of certain conditions of their tenancy agreement.

Naughty, perhaps, is one way of describing it.

Maybe persistent rent arrears, maybe.

And then there'll also be just the opportunity for the landlord to regain possession if it was to say, look to sell the property or if it actually wanted to occupy it itself.

Because not all landlords have a portfolio of property.

It might simply be that they bought a property when they were younger and they moved in with a partner since that yet retained the property and look to then maximize it from an economic point of view.

So it does strengthen that, whether it does so at the expense of reducing the landlord's flexibility.

Again, we aren't, and I think we need to stress this just at the outset, for a good landlord and a good tenant, these really aren't going to make a huge amount of difference.

It simply prevents bad landlords from acting in a bad manner and it stops bad tenants perhaps benefiting from previous behavior and previous bad behavior.

To allow them to extend their tenants.

Yeah.

I have to say, I think, I think it is actually going to make it harder for landlords to get back their property from those tenants where there has been bad behavior on the tenant's behalf or say if the landlord.

So at the moment, if a landlord wants to get back its property, it can do so on a no fault ground.

It's known as a Section 21 notice.

You serve it, you wait two months and then a landlord can get.

You'd have to be finished their fixed term.

Exactly.

At the end of their fixed term.

Then the landlord can serve two months either to expire at the end of that fixed term or after the fixed term has expired.

Say, right, you've got to get out,.

You've got to go.

And then the landlord can get the property back.

Whereas under these new rules, a landlord won't have this option of a section 21 no fault notice.

So they will have to rely on a ground or which can be all of those that Michael just mentioned.

So if they want to sell the property or if they want to.

How about improve the property?

How about they've got block of old flats at 20, they want to knock it down and build 50 flats.

Yeah.

So I think redevelopments.

Definitely one, you'd have to demonstrate that it's not reasonable for you to then do the work to the tenants in situ, which in your situation would probably not be a viable option.

Oh, wow.

But that's this.

So maybe, I don't know, replace windows or repair the roof.

And what I think about is what happened to me many years ago.

You know, you think of the big landlord and the big buildings, but there's a lot of renting.

That's just you just renting a little flat somewhere.

And then we had some very, very difficult tenants, but I don't know, we would have been able to catch them out on anything particularly.

Do you know what I mean?

They wouldn't, you know.

Yeah.

Had a mandatory ground probably, but they might not have been a good tenant generally.

Yeah.

And you, and you know, you might.

Have just wanted the problem friends originally and then there was this big fallout between whatever there was.

It was just one of those situations that you then were like, well, I don't want them there anymore and whatever.

So I guess forget about my personal example.

It's just these situations are so gray, aren't they?

Yeah.

And also it is going to be much more difficult.

So say if a landlord now going forward after 1st of May, if they want to get the property back because they want to sell it now, they will have to give four months notice to that tenant in order to get the property back.

If the tenant, even if they've behaved badly.

No.

Okay, this is, this is assuming no fault.

There's no fault and I need to sell the property.

So I'm allowed to.

And I've got to wait four months.

Exactly.

I have to give four months notice.

Do they have to pay the rent for the four months?

Yeah, they have to continue paying the rent.

What if they don't?

Then you could get the property back on another ground where you have to give four weeks notice instead.

So.

Yeah, the, the notice periods change depending on the ground you're actually relying on to.

Yeah, but I give notice for four months.

Why should I bother paying my rent for.

For the four months?

Because they're not going to do anything.

But by it, by the time I leave, I know I'm being callous.

Well, you will.

There will likely be a deposit that's been provided by the tenant.

Not.

Yeah, in most scenarios there will be.

So that in itself is something that the landlord could claim against.

But anyway, ignore my rabbit hole.

So now it's going to take four.

Months and that's if the tenant leaves at the end of the four months.

If they don't.

You say refuse to.

Yeah, say if they refuse to, the landlord still has to wait four months before they can initiate court proceedings.

And then the court proceedings will take about.

Well, even at the moment, they take seven months approximately.

And we're expecting that there will be many more cases going through the courts as a result of these changes.

So it's going to take even longer.

So I could be sympathetic and say, well, maybe the tenant hasn't got the money and is having a really bad time.

We don't want to throw them out onto the street.

That's bad.

But then you could go the other way and say, well, maybe the landlord is a little landlord and they really need the money because they're in a tight spot.

They're likely to have a mortgage to pay, not necessarily owning it outright.

True.

Who's paying that mortgage if they're not receiving the income from the rent?

And once if you get to the four months and they haven't left.

So.

Yeah.

So at the moment, what do you do?

You've got.

It's Two months.

Yes.

And then seven months.

There's only an extra two months, isn't.

It, if they don't leave?

Yeah.

I mean, once you're waiting that long.

Well.

And yeah, there's no guarantee that the tenant will be paying during that period in any event.

So you could very well and very quickly accumulate some considerable debt that you may never recover.

If the tenant is in financial difficulty, you may have to make them bankrupt to try and recover it, which in itself isn't a particularly pleasant experience.

No.

Or often resulting in actual payment.

What does that do to you?

That's, that's that standard thing that.

The counterintuitive thing is you won't want to have a tenant who's not a good person.

And that becomes a difficult question because that changes because it's territory.

What I've seen is the fact that they might be a nice person, but now they're in the space, it's their home.

The dynamic does change.

There are also protections in the new legislation.

So you kind of can't discriminate against people on certain grounds.

So you can't say, oh, I won't rent to you because you're receiving benefits, or I won't, you know, I will decide not to rent this person because they have children or a pet or whatever it might be.

So, yeah.

Is this, is this being driven.

Have the.

I mean, there might there be some terrible landlords out there, but is this being driven from that?

Is there a real problem out there that needs to be solved?

I, we were discussing this.

I, I think we have slightly different opinions on this.

Oh, well, let's have them.

I think the current system is quite fair.

So under the Section 21 system, no fault system, a landlord can give a tenant two months notice.

Equally, a tenant can give notice and can leave.

So both have this option to terminate the tenancy.

Under this new system, we're getting rid completely of what's known as assured short haul tenancy.

So all tenancies become periodic tenancies and that means that a tenant can terminate it at any time on two months notice.

So wait a second, let's go slowly.

So assured, currently, that's a phrase I'm familiar with, but I've never really stopped to think what it mean.

Assured shorthold tenancy means you are guaranteed 12 months or something.

Is it?

Or, I'm sorry, an assured shorthold tenancy is effectively the fixed term tenancy that almost all tenancies between a landlord and an individual are entered into and it.

Requires them to pay the rent.

For 12 months, say with a 6 month break would be the classic shortage.

Yeah, if they've agreed to that.

I mean one of our colleagues was just talking to us now where, where she wasn't even given the option of a 12 month fixed term tenancy.

She had to take a three year fixed term tenancy.

Yeah, you go for longer ones, don't you?

But you're saying that even with the three year, I can still at any point in that give two months notice.

From 1st of May.

So we're saying that from the tenant's point of view, whenever they want, they can give two months notice.

So from their point of view, they don't have a contract basically because they.

Can, they will obviously the first of maybe meanwhile.

I'm sorry, this is like, I, I look, I, yeah, I don't want to sound like I'm like super right Ring, but meanwhile, this is an unfair contract.

Meanwhile the other party has to do the, has to allow them to have it for 12 months, has to give four months notice.

It's unfair in the sense that the tenant then doesn't perform its obligations.

If the tenant's a perfect tenant, then actually the landlord's not losing out in the sense that, yeah, that's in behavior.

But in contractual terms we've got a very, very.

Well, yeah, that's what I'm saying.

I think at the moment it's relatively, relatively fair.

A tenant knows it has security for a certain amount of time, whatever is in a short haul, tenancy, a year, two years, whatever it might be with a break, and a landlord knows that it can give two months notice after that period has expired to, to get that tenant to leave.

Now we're completely switching things over.

So a tenant only has to give two months notice at any given time.

So the landlord doesn't have security of knowing that that tenant is in place for a certain amount of time.

But the landlord can't on the other side easily get a tenant.

I guess you could argue that moving's a pain.

No one wants to move out of somewhere.

If you're, if you have to, if you move in and you want to move out in two months, that's probably because the property, there's something really wrong with this property or you really have a financial issue.

So maybe I can be sympathetic because the inertia of moving out is not a minor thing, is it?

You've moved in and then you're immediately saying I don't want to be here.

Well, that, that's dealing with, you know, and I do have some horrible stories.

I'm up with my friends.

When you move in and there's damp and the boiler doesn't work and the landlord's an asshole and stuff.

So you, you wouldn't even have to have an argument over the 12 month Tennessee.

You just say, well I'm giving you notice.

Because I could argue that, we could argue that.

Why else would you suddenly move in and out?

Yeah, but shouldn't it work both ways?

So with commercial periodic tenancies, either the landlord or the tenant can terminate by giving.

So I just don't see why.

Because the argument would be that your turf is that this is their home.

You're turf with the Mao.

Landlords obviously in the views of this government are no doubt a load of greedy, evil people with lots of money.

You know, there's a, there's a narrative here, isn't there?

And as usual in life there are greedy, evil landlords.

Hello, nice to speak to you.

But you know, there are people out there who are less, you know, less concerned about people's well being than their bank balances.

And as usual law is, is being wrapped around those 2%.

I'm, I, I don't know and whether it serves as any purpose here, but probably there might mean another solution to deal with the bad landlords rather than, you know, punish the other ones as it were.

And I suppose as Michael says, like where, where we're talking about a good tenant and a good landlord.

I don't think this is going to be a big issue because as you say, tenants aren't going to want to leave like constantly be leaving premises.

The only time it might be applicable is if you've say got a desirable property in a desirable area and people actually think it's much cheaper than perhaps going to a hotel and actually think, you know what, I'm going to be in the particular place for a fixed period of maybe two months, three months perhaps.

I don't really want to have to find.

That's a good thought.

You say, I'll take the tenants if.

I can break in.

Why not?

That may be something that they're thinking about.

It seems to be quite a specific example that I don't know.

That's a bloody good idea though.

Michael, I hate to say for people who, because it's hard to get short tenancies that are good value.

Well, maybe we've actually just found the benefit of this particular act but.

Very good point.

Whether that is intended or not is another thing.

But what else do you think landlords are underestimating I think the other thing.

In this is that they can, they're going to be restricted in terms of their rent reviews.

So they can only do one rent review each year.

And if they, and they have to do it to market rent and there's going to be a lot, how do.

They know where the market rent is?

I mean, you'll get agents and valuations and a tenant will be able to, A tenant will be able to dispute it.

There's going to be systems in place and a property ombudsman is going to be put in place so that they can dispute these things.

This sounds like a nightmare, this sounds like a tribunal mess.

If I can cut back in Paris and let's just say look at the current situation.

If you had a rent review under your existing AST at the end of the fixed term, so landlord might decide that he wants, you've been in there a year, you've been paying a thousand.

It's very difficult to find a premises or a residence to move into in that short period which then potentially forces the tenant to feel that they've been backed into a corner and have no choice but to accept these perhaps ridiculous terms or less than market rent or, sorry, more than market rent.

And in your professional career, how often is that happening?

Well, a lot of this is actually outside of our, I suppose, general day to day work because we're doing more commercial work in practice.

We tend not to see or get involved simply on a cost basis in this type of work.

We may see it in common law tenancies which outside of the Housing act so don't necessarily have the same protection which have an annual rent of over a hundred thousand pounds.

But that's more of a contractual basis here.

It's something that you hear anecdotal stories through friends who either rent or are the landlords.

They tend not to be friends for that long.

If I'm hearing that they're hiking rent up by 50, but sometimes they do that.

I think you made a good point earlier that at the moment a lot of landlords might not increase the rent every year.

They might, you know, if they've got a good tenant in place, they might just leave the rent and maybe at the end of three years, you know, when market rent really seems to have increased, all of a sudden they will look to increase the rent in line with market rent at the moment.

So now, now that they can only do it once a year and in line with market rent, they're probably going to do it every single year so that the market rent continues to increase.

So that you know, these unintended consequences.

Exactly come through.

What do you think from the tenants risk perspective, Michael, is that no one talking about.

Well, the point Gemma just made is actually a very good one.

There were situations where tenants, and this goes back to I think the point we made about there being anti discriminatory points included now where the tenant could make an upfront payment of maybe six months or nine months rent if they're going to be there for a long period of time.

They had the funds available, just made maybe economic sense from their perspective.

Now they can't do that and that would have given landlord comfort that they.

Can't guarantee they can't pay, they can't.

Accept more than one month.

But that would then be deemed to discriminate against a tenant on benefits who can't afford it or not necessarily even on benefits but simply you can't afford it but you may accidentally prejudice willing.

To give me nine months down.

Exactly.

Yeah.

So now it's limited to one month in advance.

That's such an interesting rules.

Trouble with rules, isn't it?

It's, you know, the unintended consequences are so mad.

Okay.

It changes the market.

Those types of things could be for the good and things like not being able to accept a higher rent than what you've advertised it for.

Yeah, I think bidding wars are terrible.

Really?

Yeah.

I think that you can read stories in the Metro or Evening Standard or other publications.

Now you can't do now so you can't.

If you, if it's put on the market at a thousand pounds.

It's got to be a thousand pounds.

Well, no, no more than.

So you can accept lower offers.

We're checking at the moment.

I don't, I don't think that is because they're going to be setting up the property.

Well at present it's not something that they are.

That's the whole point.

It's illegal.

But yeah, okay, I shouldn't ask that question but I was like that's a hell of a thing to police.

And also again another unintended consequence perhaps what's probably happening or will happen in the short term is that rental prices will go up.

I think a lot of landlords are probably going to be looking at this, maybe think or be uncertain as to how it's actually going to make a day to day difference to them.

And I can almost guarantee that landlords will be leaving the market as a consequence.

Too complicated.

They just don't want the aggravation of.

It or leave the market by selling their properties and then you have, you.

Have an absence of supply, the same amount of demand.

So prices as a consequence.

Sure.

They sell to someone who also rents it or.

Well, I think the rental market is.

I think the people who rent are probably in the rental market for a reason.

They simply can't afford to buy it.

I don't think if you maybe reduce the price of a first time purchase by £10,000, it's going to make a huge difference.

You'll probably find instead that the people who rent are quite a consistent number, maybe just getting bigger and bigger.

So they don't have the deposits or the job security or the intention to stay in a place for a particularly long period of time.

So unless you're managing that demand in an environment where supply is shrinking, the inevitable consequence of that is that rents in the short term certainly will increase,.

Although it also means that there will probably be more properties on the market for sale.

And so some of those rent.

So property values may go down as a result.

And so some of those renters might actually be able to get onto the property ladder.

That would be a good consequence.

Certain landlords will spot an opportunity and if they've got the funds available or if they're prepared to take loans, they may actually think, okay, I'll corner the market a bit more than I already have and expand their portfolios.

There'll be certain landlords who think, you know what, I don't see this as a problem because my experience might be that I'm a good landlord, I'm happy to comply with regulations.

I have no desire to move tenants in.

I'm buying properties that I'll redevelop and then have no need to evict or not evict but to remove tenants on that basis.

And I'm happy to sit on this money for however long as an investment.

There'll be those tenants that are happy landlords.

Sorry, that are happy to do that.

So overall it's a big change.

Not exactly sure how it all pans out.

Well, we have seen the number of landlords leave the market and this is.

There are certain surveys, people say, oh my, no, I think this was a. Yeah, exactly.

No one's really going to have a huge amount of sympathy for a, for a landlord who.

Which in their eyes is screwing over giveaway landlord.

You know, it sounds so, you know, a lot of these things People just own one property, don't they?

Or the Prince.

Yeah.

The private rental sector, in that sense, where you have a single property landlord is.

Is quite high.

It's not professional landlords, which are probably the minority.

Yeah.

And is there anything we haven't mentioned about it before we move on?

Well, at one point on the Section 21 notice, which is good, it did give an imbalance really to the landlord, strengthen their position after the expiry of the fixed term and allowed them to really dictate the terms of the future engagement really, with.

With the tenant.

I don't know if it necessarily was an imbalance, though, was it?

Because after the end of the fixed term, all ASTs effectively become periodic tenancies and so a tenant can also terminate.

Oh, no, absolutely.

But the tenant was less likely, I suspect, to.

By comparison to the landlord, or use its threat of giving notice and leaving the premises as a way of leveraging better terms for itself.

I've not really heard of many tenants saying, if you don't reduce your rent by £100, I'll leave the premises.

Because the landlord will say, well, okay, fine, leave.

I can then charge another £200 again.

And I think we stressed it a number of times this really will impact bad landlords, it won't impact good landlords.

And all you have to do is look at articles that are released in most.

Most press outlets.

You have Certainly, up until the 1st of May, stories of larger landlords that have blocks of residential property serving Mass Section 21 notices on all of its tenants to remove them.

Which in itself is.

Yeah, that is a materially unfair and manifestly unfair situation.

Tenants that haven't done anything wrong, they're simply in the wrong place at the wrong time.

Being asked en masse.

Well, not being off, being told that they have to give up occupation.

Yeah, probably.

And then you look at the other.

Could it.

Could it be said that.

And I don't think it's going very well.

This might be a more comfortable set of laws if they were doing really good on pumping out properties, you know, building houses, building available.

So there was.

There was stock coming onto the market, but I don't think that's happened at all, has it?

Or they were trying to do what, 300,000 homes and they're at five.

Maybe not quite as low as that.

The target still hasn't been met.

Not even.

But I don't think targets that have been set by previous governments have been.

Yeah, no one's met.

The reality is there are so many external factors that Impact that the cost of borrowing money being one, the cost of materials, the cost of labor, planning stagnation or certainly delays in actually getting the developments through to the stage that they want to make them viable and profitable.

It's, it's very difficult changes in how local authorities receive payments on grants of permissions for more than maybe to 10 units at a time that seems to be making well actually under 10 units now.

This will attract less people to come and develop property.

What does it, what does it change?

What do I do if I want to go into property now?

I'm not looking at rent.

I don't know.

I think you would still look to go into development, but you would be developing for sale.

You wouldn't be for example.

Yeah, that's what I'm meaning.

You would be looking to rent.

It wouldn't buy to develop.

I mean you might necessarily, you might, but you.

What you.

It's mathematics, isn't it?

Whereas the.

If there were 50 going to sale and 50 going to rent, now there's going to be 70 going to sell,.

More going towards sale.

I mean especially after kind of the changes so that you can no longer deduct mortgage interest off of your rental income.

There's just so many things that I think make it less attractive now to, to invest in residential property and therefore.

There'll be less supply of renting.

Yeah, I think so, yeah.

It's that sort of thing we never really understand but we sort of feel it's almost we have a right, there's a sort of country culture of sort of we should all own our homes, isn't it?

I mean it's fascinating how little they do.

Home is your castle.

Home is your castle.

Okay, let's move on.

So this is renting.

Now the thing that I can't quite get my head around is leasehold is disappearing in this common hold concepts coming.

Yeah.

So let's talk about lease sales because this where it gets properly structural or why is leasehold become such a political issue in the uk?

What's wrong?

I think a lot of people, I think a lot of people when they buy a property, certainly when they buy a flat, I don't think they understand.

When they think they own that flat, I think they don't understand.

They buy as a lease.

They buy a lease for 99, 99 years, 125 years if you're lucky, you're buying a 999 year lease which we consider to be a virtual freehold because it's going to go through many generations of Your family before.

Because whoever owns it now, it's gonna be so long gone.

We knew.

Jesus Christ.

By the time.

Yeah, they're flogging it off.

Yeah.

So that is a virtual freehold and that.

That type is fine.

Right.

There's not really any issues with that.

The issue with the shorter term leasehold, what's common?

Common is 99, isn't it?

Common at the moment is 125.

99 May have been common historically, 40, 50 years ago, but certainly not now.

Oh, interesting.

Okay, so let's say you buy your leasehold property 125 years.

125 Years.

Right.

And then we're talking.

You look to sell it 25 years later, 100 years left, you can still buy.

Someone will still buy it.

A bank will still lend on it.

So someone has bought this with 100 year lease.

Now they live there for 21 years and all of a sudden it's at 79 years and you look to remortgage it.

You can probably get a mortgage, but it's going to be difficult to get a mortgage.

So you look to extend the term of your lease, which you can do, but it's going to cost you quite a lot of money to do it.

So that's kind of the whole leasehold system and that's what they're trying to move away from.

And I think in large part it's because people think it's unfair that you have bought a property, you have bought a flat at the market value, but 20 years later you have to pay more money to continue to own that property.

I think that is.

Yeah, I think you're exactly right.

I think they make the assumption that any asset you hold in property will only ever increase.

They cannot accept that a leasehold property is an asset with a diminishing return.

It's one of the few assets counterintuitive.

Exactly.

As opposed to a freehold property, which over time, all things staying equal would simply increase.

At least is the opposite.

And you get to a certain period where the actual value drops dramatically for.

For the reasons Gemma mentioned its inability to be lent against, as in secured by way of a mortgage.

They'll get to a period, and I think that may be 70 years now, where lenders will not, for the most part lend or grant you a mortgage to purchase that.

Because it's in itself deemed to be quite A. Yeah, 30 years.

It could be.

It could be anything up to 40 years now.

Yeah, so.

So you've got something with 60 years left to run.

They don't want to do it because although there's enough time for it to run, the value is also going down.

And, and it is rare, to be fair.

It's got to be worth something.

It will be worth something, but it's.

Also going to cost a lot to extend that.

Yeah, yeah.

Okay.

So it is a problem.

And we're what we're.

The rest of the world has moved on and we've sort of sat around.

Yeah.

Sausages, you know.

So at the moment, leaseholders have a right to extend their lease by 90 years.

They have an absolute right.

They have a right.

So it used to be that you had to own that property for at least two years before you could extend it by 90 years.

That little bit has gone away.

So now from day one, once you own a leasehold, long leasehold, so over 21 years, once you own a leasehold property, you can extend the term of the lease by 90 years, but you will have to pay for that.

You'll have to pay a premium for that.

And if your lease, if the remaining lease is less than 80 years, you are going to have to pay quite a significant amount, most probably because you're.

Sort of re buying the property.

Yeah.

So the reason is it's something that in property terms, we call it marriage value.

But sort of the easiest way that I can think of to explain it is the person with, let's say a 70 year lease, they own half of a jigsaw puzzle.

And then the freeholder, the, the person who the property is ultimately going to go back to, the landlord owns the other half of the jigsaw puzzle.

They each have their own value, but it's less than the amount that it would be worth if you combine the two of them.

Right.

So if the lease worth 70 years is worth £100,000 as an example, and the freeholder interest is worth say £50,000, you combine the two of them and it's worth £200,000.

As a whole, it's a freehold.

Yeah.

Then that difference, that £50,000 difference, you split that between the two of them, it's £25,000.

And that would be the amount that the leaseholder would have to pay to get the increase.

To get the increase.

How this worked out is it.

That's how it works.

Yeah.

In simple terms.

But it gets that simple or not?

Yeah, very.

That's very well explained.

Yeah.

Okay, I see.

And if you're down at 10 years,.

And if you're down at 10 years,.

Your bits worth nothing.

The whole thing's worth 200.

Now you're gonna have to pay 150.

Yeah.

Or something.

Exactly.

Yeah.

I mean, what, 10 years wouldn't be worth 50.

It would be worth whatever.

Yeah.

So suddenly you're going to have to pay an awful lot to extend.

So you need to extend early.

That's the question of your.

So if you.

Financial.

Yes, and it's also what you know about this.

Right.

So many leaseholders don't realize they.

They own a leasehold.

So do they know people not know this?

I mean.

I mean, the solicitors, their conveyances would have told them when they purchased the.

Property, but maybe they told them in the con to their kids or 30 years has gone past or what?

More likely they've been sent to reports on title, which they may have read the key terms.

They may have simply just missed this or just not giving it the attention.

They thought that a lot of people are just really excited to be buying a house.

It's not something they do that often.

They rely on the solicitors to point out problems.

And I said, time is so sort of.

So they just see the bigger picture, which is, I will own this flat.

They don't necessarily look at, oh, what will I actually be buying?

Is it leasehold, is it freehold?

I can guarantee the number of conversations I've had with people who've bought a flat and they still call me and say, I don't understand why I'm having to pay for these alterations to my property.

I own the freehold.

And then you're having to explain to them that that's not the case.

So it's.

You don't want to say that it's a lack of education, but it's just a lack of, I suppose, understanding as to the difference between the two terms.

Because, as I say, most people see one and assume that they've got a freehold, whether or not that's the case.

Well, not yet.

So that's.

That's a separate thing that we can talk about.

But under the Leasehold and Freehold Reform Act.

Now, this isn't like.

This isn't in force yet, but the.

When's it coming enforced?

We don't have a date yet.

Okay.

So.

But the plan is that when people look to extend their leases, they won't just be able to extend by 90 years, they'll be able to extend by 990 years.

Oh, wow.

Yep.

So they're turning them all into freeholds.

Effectively and they're getting rid of marriage value.

The thing I explained earlier.

So that that really high premium that you pay once your lease is under 80 years they're getting rid of.

So I'm going to be able to get a 999 year lease for.

Not very much.

For less.

Yeah, for much less.

Let's do some example numbers.

Let's do your.

The places.

No, no, it depends really on when you extend because I think, and again I haven't got any figures to, to go through it, but the ones I'd seen in calculations on surveyors websites whether if you were extending your lease anything between 81 years left of your terminal 150, it would cost you more than the current system.

But if you're extending it with less.

Than 18, a lot more years too though.

Well you'll get a lot more years, but the cost would actually just be higher than the current regime provides.

Yeah, but you're only getting 90 years under the current regime.

But for most people that is more than enough.

If they've got us 81 years already, adding another 90 on there gives them a nice 171 year lease, easily remortgageable for the next.

I just think 100 years.

They're moving them all into freeholds though, effectively.

And so the landlords have.

Well, the danger here I think is that we're almost like crossing two separate acts that aren't even in force or in place.

Obviously we know the Leasehold and Reform Freehold Reform act, which is the one that the, I suppose abolition of the marriage value calculation that is much more certain to happen.

It's just a case of when the one where you're mentioning changing the whole leasehold structure to common hold that is.

And we'll come back to that.

Yeah, but you're still turning into freehold.

No, it's not turning it into a freehold.

Oh no, just to be clear on.

Yeah, I'm not going to the common.

I'm just saying if, if I'm sitting in a place and I've got 20 years left, I can turn it into a freehold.

You turn it into a virtual freehold.

Virtual freehold.

So I get my words right.

But 990 years, I mean.

Yes, well be.

Yeah, I mean what happened a thousand years ago?

Let's try and think back.

Not too far away from here.

British history written down back then.

I mean there certainly wasn't consulted the Doomsday Book.

I'm sure yeah, well, and the other big thing that they're doing is they're getting rid of of.

Well, no, they're capping ground rent at £250, aren't they as well?

So ground rent is another.

It's a rent that leaseholders pay every year and at the moment freeholders can put in whatever they like when they grant these hold.

I think actually on that is our new leases granted at Peppercorns and that'll include lease renewals.

I think the £250 perhaps is when it comes to evaluation on.

Under the new scheme for.

And that's what they take into account when they make the new calculations.

I think I thought they were capping ground rent at £250.

All new leases are at Peppercorn.

Yeah, all new leases will be at Peppercorn.

So at least renewal will effectively be.

But no, I think the point is if you have an existing lease, if you have an existing whatever it might be 125 year lease and the ground rent is say 500 pounds, that is going to be capped at 250 pounds.

So I've got a client who has an escalating ground rent that in about 150 years time will be about £6,000.

That is going to be capped at £250.

And the tenant has to do nothing together.

No, nothing.

Yep.

I'm trying to get my head around this and I think land is quite a controversial topic.

I even have some sympathy for those out there in the tax world or the, you know, the people who say that the.

One of the real fundamental injustice in capitalism is the ownership of land.

I think it's a really complicated conversation.

But underpinning this I, I get the fact that maybe the, the ability for some people to own land and benefit from his income forever when the land really isn't anyone's sort of.

Do you know what I mean?

This sort of the concepts.

I know I'm going a bit deep and left wing on it, but there's a sort of underlying thing that ownership of land could be argued as one of the problems in capitalism that creates people who have value and others suffer from it.

But the funny thing about this, this is kind of of turn is making more people, I guess doing that and I guess that's good if we live in a system of owning land.

Because if I have a 999 year lease, can I do what I want?

Can I rent it out?

Can I.

You can rent it out, yeah.

You can't stop me doing whatever I want.

I'm Basically, version, the terms of the.

Lease that you will still have may restrict you, but it's very unlikely.

Yeah.

Not in a 999 series, maybe it's.

Quite clever as a distribution of wealth.

It's forcing.

It's forcing every.

You're almost the best place you could be right now is to be in a lease and then force the.

But you've still got to buy the big number.

But you can go to the bank and say, this law's come out, I was stuck in it.

Or lease now I can buy my property, it's 150 grand force.

I can force the purchase when it's happening, which is obviously part of.

I think that's the struggle is we don't know when this is coming into force.

And so the really, really tricky thing at the moment is you have some people who.

I say it like the 70 year point or the 69 year point, where it is going to be quite expensive for them to.

So they don't know whether to do it now.

They don't know whether to do it now and bite the bullet or wait.

But then they've got a diminishing lease and then it's just going to be more expensive.

If this doesn't come into force.

Well, it might not come into force.

If it doesn't come into force, why.

Don't we know where it's going into force?

Why are we even talking about it?

So we're waiting for secondary legislation to actually bring this into force.

But it's been passed.

It's been passed.

Yeah.

So this is a really interesting moment in the politics of this because it feels very sort of.

But this is actually the Conservatives doing this, but they passed it all that year ago.

I can't understand our country at times, but they don't know when they're going to bring it in.

So what's the point of passing something you haven't said when it's going to come in?

That's unusual.

Look at an act as, say, the.

The skeleton of the law.

The regulation is now going to be the flesh, the fills that out.

Yeah.

And the thing, the thing with this act is that there's a lot of institutional investors, there's pension funds who will have bought buildings or estates on the basis that they would get these premiums when.

When individuals extended their leases.

Yeah.

So there's lots of people, lots of pension funds, lots of major investors who've invested in property in the UK on this basis to develop properties and they're now being told this, this will change and this is where my old man sort of rightly saying, well, it would be fine if you brought this in and said, for all future property, but the fact you want to apply it retrospectively is to some extent theft.

I mean, and again, people may say, well, my heart bleeds for these wealthy people who own property sort of thing, but people make investments.

And you want people to make investments to develop and create properties, don't you?

And if, if you change something like this, well, they might be slightly less inclined to do so.

Well, and another reason why it may be taking slightly longer than some of the other provisions of the same act.

So this act didn't simply deal with abolition of marriage value, but is that there are judicial review claims being brought by pension funds, institutional lenders who have a vested interest in the system remaining judicial review is.

You go to a judge and you ask them, so what's judicial review?

Oh, yeah, it's a process of the court's checking that the government itself is making decisions in a lawful manner correctly and acting as it ought to within its powers.

Within its powers, yeah.

Very good.

Does this genuinely empower leaseholders or does it make a complicated system slightly less painful?

It definitely empowers leaseholders.

Yeah, definitely.

It gives them far more, far more rights.

It makes it cheaper for them to extend for longer.

So, yeah, from a leaseholder perspective.

Yeah, when it happens.

Yeah, it's just for this moment.

And the losers here are the freeholders, developers, investors, mainly the freeholders.

I wouldn't say it's necessarily the developers.

The developers would still develop and just sell on, on 999 year leases rather than on 100 year leases, 125 year leases, the market value at 125 years versus a 999 year lease, I wouldn't say is much different for a developer.

What you said was interesting at the start of this.

I felt you both agreed that ultimately people didn't understand leases.

And ultimately people were getting caught in tricky situations.

The clock's running down.

So maybe overall thumbs up, maybe it's okay.

Yeah, I think, I think on the whole, and maybe people will come for me for this.

I think this puts leaseholders in the position that they thought they were in anyway.

Okay, brilliant.

We'll move on.

Yeah.

Common holes.

Well, I just think of common land, which we still have a concept of.

Dawny Dorney.

Dorney.

Common, I can think of.

So common hold.

I guess this is the bit people really don't understand.

So the common holder leasehold reform bill is basically trying to replace leasehold altogether.

Yes, correct.

And in simple terms, what is common hold and why haven't we got it here?

Well, common hold, for all intensive purposes, you own the freehold of your unit in a building, your flat in a building, and then are a member of a common hold association which owns, manages and runs the communal parts and the rest of the building.

So your flats you own outright as a freehold and you then are, via either a shareholder or shareholding in the common hold association, owner of the building.

Hang on, hang on.

At the moment I build a big building, let's say it's got 20 flats in it.

I then used to grant leases on these building things.

That's gone now I build the big building and I have to find 20 people all at the same time and they all then take the freehold off me.

No, they will just.

You will just sell off each individual.

For flat and it includes a piece of freehold.

It will include a piece of free.

1 20Th of the freehold.

Yeah.

So every, every flat will come with.

Well, no, no, no, no, as in it will just be.

So actually, our system, like the leasehold system, is way more complicated than common, I think, than common hold.

So Australians cannot get their head around our leasehold system.

They're like, why are you making it so complicated?

So with common.

They say that about all our systems, to be fair, some of the Aussie systems, so to break it to you, they're pret it too.

But let's, let's assume they got this one right.

So with a common hold, it's not about, like, we have to get away from this idea of a part of the freehold.

It is literally your.

You own your flat.

That is all it is.

You own your flat.

Freehold, the freehold.

There's no lease, there's no you.

Can you sublet it?

Can you make alterations?

Do you have to pay a ground rent to your landlord?

No, you just must own the flat.

Who owns the roof?

The associate?

Well, no, the.

The association as a whole.

Corridors.

So then there's an association set up which runs the common paths.

Correct.

Which you're a member if you have a ultimate obligation to.

To ensure it's done and actually participate.

Do you pay to be a member?

No, you don't pay to be a member, but you pay for the services that are needed for the whole building.

Yeah.

The roof being maintained, the windows, carpets being hoovered, the lights being left on in the common parts, the lifts.

Perhaps you can.

There's no landlord anymore.

No landlord, so they call it in Australia.

They call it a body corporate.

Yeah.

And then from my, from my experience of my.

So my in laws live in Australia and live in a building with flats and nobody ever wants to manage the body corporate.

So some busy body.

Yeah.

So no one wants to get involved.

Yeah, exactly.

Like you have to be the one.

Getting, you don't want to do that.

You have to be the one getting everyone to pay their contribution towards all of the services.

And there's no lease in the way that we have it here.

So you know, it's difficult to get everyone.

So this is good.

In simple terms, we're so used to.

The leasehold freehold system that it's really difficult to get people to.

So what are they doing?

They're going to stop people being able to do leases.

Stop.

Yeah, stop people being able to.

When did the common hold concept come about in the UK?

Market didn't naturally adopt it just because we were socially conditioned.

Yeah, we're just so used to it.

When you sell a property, if you're an investor or a developer, you're just so used to granting these 125 year.

Leases and it wouldn't simply be the developer who has maybe the, the reluctance to go that way.

It might simply be that the lenders themselves aren't or haven't included in their underwriting process a way of valuing a common hold development.

So a lack of availability in the mortgage market may well actually drive buyers away from that model or sorry developers from offering it to buyers.

I have to say it does sound better like because it is really annoying when you have to get permission.

You know, you pay quite a lot for your flat but you're not actually got a right to have your dog there or smoke cigarettes in the room or.

I don't know, do we think, do we think parties.

You don't matter parties.

I think you still have an obligation to not be a nuisance to your neighbor.

But I wouldn't know what you're talking about seeing as I never had a statutory legal order and you can't google my name and find.

Find.

I was done for noise abuse.

But anyway, carrying on.

Yeah, but do we think that, I don't know, do we think that leases.

I don't know, do we think that leases make people better neighbors because you have provisions in the leases that say you can't do X or you can't do Y?

No.

In my experience you get this I've got a 999 year lease.

Oh, gee.

Yeah.

And I'm a property lawyer and I read it when I first just, you know, bought the property.

Most people don't.

But have I looked at it since?

No, I just get on with my neighbors and we decide amongst ourselves, you know, what's allowed and what's not allowed.

I think that in practice that's what happens.

Yeah.

So.

And is that a basic piece of advice?

You say most people don't read the lease.

I mean, I would say that to anyone.

I would say read the document.

What if I give it to AI now?

Yeah, absolutely.

Well, that's definitely an option.

Yeah, give it to AI, but read it.

So I think the amount of people that they probably get a report on title from their solicitor and don't read it, at least put it into AI get like the head.

Oh, sorry.

It's when we act on behalf of a client and we purchase a property, we prepare a document known as a report on title and it summarizes the terms of the document, it summarizes the title document and it summarizes all the due diligence we've done on this property for them.

Okay.

And when I say we summarize it, it's still quite a long document.

So I feel that a lot of people don't necessarily, necessarily read it.

Yeah, interesting.

Okay.

But these are big decisions in your life.

You maybe should sit down and make the effort to go through it.

I think so.

And they're not as complicated, especially with the help of AI now they're not.

The help of AI and the help of a good legal advisor really.

It's the ability to ask them questions and actually get an answer that cuts through the, the so to speak.

Yeah.

And I think a good, a good one, a good report on title should, should highlight things that you should really be thinking about.

Or your solicitor should be picking up the phone and saying this has only got 80 years remaining on the lease.

Maybe don't buy it.

Or if you are, just make sure you've got a contingency fund to pay for the inevitable lease extension.

So if you combine all this.

So we've got renters reform, leaseholder reform and a push towards common hold.

What happens to the supply of housing?

Well, the common hold one isn't going to necessarily impact how or how much is supplied.

It'll simply just change the, the products being put into the market.

It'll now be common hold rather than leasehold.

The same number of units I would expect will be Built because developers will still be able to, to make the same amount of money.

It'll simply just be a change of ownership and an immediate increase in supply of maybe lower value properties.

The, the one bedroom, two bedroom flats that are typically being let or rented to individuals.

So that may in happen in the short term.

Whether or not it carries on in that way.

I don't see landlords leaving en masse constantly from now until, well time immemorial.

So that's not going to have a huge effect.

What we need to do is actually just promote more building and that's really the issue.

And as we touched on earlier, the cost of financing.

You need to do what?

Promote more building, more actual development.

Right.

That will make the biggest supply.

Pick a difference to supply.

What is stopping us bills at the moment?

You know, not specifically, but I would guess the cost of borrowing money is quite high.

It's what we're a 0.75 more than we were or less than we were last year.

So it's obviously cheaper.

Why weren't we building like crazy when it was cheap money?

Well, I think the, the projects were being put in place but it's, it's a long process to go from planning to or acquisition planning and then actual fulfillment.

It's a, it's a long process.

Yeah.

And I think the costs are increasing as well.

Construction costs have increased and so everyone's got some lines so you know, getting smaller.

Sorry.

Their profit margins are getting smaller.

I think anecdotally it still takes a long time and it's not easy to get planning.

Everyone, you know, there's used to, you.

Used to be able to do it.

Three or six months is two years now.

It's sort of crazy.

Surprise me.

But the models that they're basing the finance on or the, the viability of the project at the time, by the time they actually come to implement and develop and build, they're out of, out of sync with reality really because everything has changed and across the last five years we've seen a very volatile economy.

Constant shifts and constant changes.

Let's talk about.

So I think you said there were five.

We've done three major things.

Let's just touch on these other two.

So you said there's something going on with business rates.

Yes.

So can you talk about business rates?

Yeah, absolutely.

So as of the 1st of April, I think we have a new system in place for calculating business rates.

Previously there were two multipliers that we would use or that would be used when calculating rates.

We now have five.

Now you have.

So the prior system had small business multipliers and standard multiplier rates, which were then applied and used to calculate your business rates.

Now you've got five separate categories, one being small retail, hospitality and leisure and large or other retail, hospitality and leisure.

You've then got small business or small non retail hospitality, leisure, standard non retail hospitality and leisure, and then large value of over, I think, 500,000.

All others, effectively.

So should I explain what multipliers are?

Yeah, I have many questions.

Yeah, a multiply effectively with business rates.

So business rates is sort of like you have council tax on homes and commercial properties, they don't pay council tax, they pay business rates instead.

And the how that is calculated is every property has what's known as a rateable value, which is roughly how much that property would have been rented for at a certain time on the open market.

And then you multiply that by this multiplier that Michael just mentioned.

And so depending on how large the multiplier is, the more you're going to be paying in terms of business rates.

So just as an example of one of these, the small retail multiplier is 38.2p.

God, that's a lot, isn't it?

And the rate.

There's been these complaints across business races.

They've been going up and up and up and up and up.

Yeah.

Who sets them?

The council?

It's the Valuation Office agency.

So sort of stealth tax, is it?

Or why are they going up and up and up?

It's not necessarily a stealth tax.

It's literally supposed to be there to support all of those services that we need in your local area.

So things like, you know, cleaners on the streets and.

But you're telling me that all the rental income on a street, they might be getting 38.

Oh, that's the lowest multiplier, like the highest multiplier.

It's going to be more than it takes to look after that street.

Well, the Highest multiplier is 50.8 P. So that's.

What were they when you were in your early days of your career?

They've gone up yeah, well, I roughly talk about it being about half.

Half of your rent.

Think about that as being your business rates, which is something.

How long has it been like that?

Has it been like that for.

Like that?

For a long time?

Yeah.

So it was high.

So it was higher.

So up until now we were looking at like the.

The.

The.

The lower multiplier was about 47p, and now.

And then the higher one was 55p, something like that.

So it has gone down compared to that.

Why does everyone complain that the rates have gone up and up and up?

Well, the rateable values have gone up.

This big thing that had reduced rental values.

Now, what you should do, though, all the percentages, or do they tend to use old values today for a long time?

No, they get revalued every few years.

Obviously that's.

At that point the valuation actually worked out in favor of the.

So now there's more ratable values.

The rateable value is higher now, but there's more.

You've introduced more multipliers.

More multipliers.

More multipliers.

What?

So let's just give you an example.

So a standard retail and hospitality leisure, which has a ratable value between 51, 000 and 500, 000.

Their multiplier is 43 pence, whereas previously that would have been 55 and a half and then even.

But they would have had a relief on that.

So 40 up until this year.

Gosh, yeah.

But their rateable value was so much lower and they had the relief.

So a lot of shops, restaurants, etc have been barely paying business rates and they need that to be fair because they need a lot of support at the moment because rents are so high, staff costs are so high, there's things.

Called tube strikes going on.

Yeah, really nice for hospitality.

And we pride ourselves, I think, in the UK of having a brilliant cultural scene.

So I think we need to support them.

So that is why.

But they were so low and.

And we still have this lower multiplier, but their business rates will.

They will see them going up.

So this is bad.

It's not necessarily bad, it's just bringing it to the attention of.

Of tenant.

Not that they.

They would have already been probably made.

Aware before the multiplier went from.

Let's just say it went from 30 to 60 yeah.

And now it goes to 30 to 60.

But there's more bands in between or.

No, it's just that their, their rateable value is.

Is higher.

What we've got is more multipliers.

More multipliers.

And those multipliers, the spreads wider.

Yeah.

Depending on what sector you're in.

So that.

What are they trying to do here?

They're just trying to make business rates lower for those in the retail, hospitality and leisure industry.

Okay, good.

It's good in one sense because it's fixed and it means that they don't have to rely on the relief that was otherwise available, which is now not available.

And that was the COVID relief, was it or.

No, it came out of COVID Yeah, yeah, it came out of COVID But it's.

I mean, it says whether it's good or bad.

I mean, it's just.

It's just, as Michael said, something that businesses need to factor in.

So a lot of our international companies, it's something that we talk to them about because I think they expect to just pay rent and not have any additional costs on top of that, because in their home country they probably just pay rent.

So over here, commercial premises do pay business rates on top of their rent, and it's just something to factor in when budgeting.

And you are.

You are also able to challenge the.

The evaluation of your rateable value.

So you go to the valuation office and agency and you can actually go through the process of saying, I don't agree that this figure is that, that.

And there's a formal process which we can obviously help with.

Let's do.

So that was number four.

Let's do number five, which was rent reviews, I think.

Tell me about rent reviews.

Is that not part of the first one?

So this is rent reviews on commercial leases.

Okay.

Right.

So at the moment, it's very much up to the both parties to negotiate what that rent review looks like.

And on the whole, in commercial leases, rent reviews are upwards only, which means that the.

Regardless of where the market rent is, the rent will never go down.

It will either stay at passing rent or it will go up.

That's.

What is that law?

That's just what people choose to do.

That's just what people tend to choose.

Yeah.

Why.

Why would anyone.

Yeah, Turkey's vote for Christmas.

Landlords pretty much always insist on that.

It's become almost market standard, I would say.

And so this new legislation, the, the proposal is to ban upwards only rent reviews in commercial so that you can have upwards or downwards rent reviews depending on where the market rent is sitting.

Yeah, we might, we might need that the way the country's going anyway.

You know things might be going.

So that's good.

I think it's fair.

It's fair.

It's.

Good word, good word.

Exactly.

We, we've just had.

There's a lot of effort to try and be fair here, isn't there?

Yeah, it's, it's a much better position if it gets implemented present.

It's still at reading stage.

I think it's just finished its third reading in the House of Lords.

Now it goes back to the Houses of Parliament.

Government or House of Commons.

Sorry.

And yes it has the opportunity and the possibility of making it a much fairer system for both landlords or certainly for tenants.

Whether or not it actually is implemented in full is a separate thing but we shall see.

It'll also apply not just to new leases but also renewals of existing leases.

So that's something just to bear in mind if we are advising clients at present that that if we are predicting this to come in which it probably will in its current projection it's ensuring that the 10 or or the parties know what the consequences of that and how it may well impact retrospectively because that seems to be where there is sticking points at present.

The, the initial proposal was that it would only apply going forwards.

Now it seems to be that it's going to be be applying to all leases as of I think the 16th of March this year.

You know the thing that people always complain to me about always seem to be people from overseas dealing with our property system was how complicated it was but that it was so difficult and complicated to buy a house.

As far as I understand in other countries they kind of go here's the price, you want it bang done.

Something like that.

I mean it.

This doesn't seem to be here at all.

Is that something missing?

Because if you can make it cleaner to buy homes more people could buy hoes.

Because at the moment some of the, some of the inability to buy home is the few pure friction of it isn't.

It.

Certainly is a difficult process and I, I, it's easy.

The process makes it much more difficult which is probably the same thing said twice but in reality I don't necessarily think it's the obstacle to people buying is the affordability point is by far a bigger issue.

Couldn't we have fixed that though it seems to.

It doesn't really particularly keep us in a job.

We do commercial law.

The lawyers who do seem to do it usually paid by mortgages companies and they're paid 300 pound and there's a mass like ticket that's turned.

I mean do you just out of interest, do you think that needed fixing and has been overlooked or it's not really?

I, I think that could absolutely be fixed kind of the process.

And how do we quicken it?

I mean they managed to do it in other countries.

So just listening.

I don't lazy things, trying to protect the law, the legal industry.

I just think there's so many friction points that it's hard to find a solution to it.

We do lots and lots of checking here, don't we?

That's a lot of due diligence.

There's a lot of due diligence is checking.

So.

So buyer beware.

Beware.

In other countries they're just like you check what you want to check.

But this is a property buy it now or don't.

Yeah, exactly.

And so because of that buyer beware concept that we have in the uk, everyone does make a lot of checks.

Lawyers make a lot of checks.

Sorry to interrupt.

Go back a stage.

So buyer beware applies to property.

Yeah, that's why lawyers do all these checks.

That's why we do all these checks.

And where in other countries it doesn't apply necessarily?

Well, I don't exactly know how it applies in other countries, but they do manage to not carry out all of these searches and raise all these inquiries that we do.

Yeah.

Maybe it's more.

If you buy and you find something unfit, you can go back to the seller.

It's more, more of like when you buy something online or you.

But you've got some sort of.

What do you think overall?

Let's.

Let's do who.

Let's do winners and losers.

Who's the winners out of all of these changes?

Who are the winners?

Well, not all of these changes have been implemented yet.

So if we can assume that all of these once they are implemented, I think the big winner will be those long lease holders who can suddenly extend their leases by 990 years for a much lower amount.

I think they will be the big winners.

Okay.

And that's thanks to the Conservative Party, Michael.

If we're looking back to the renters, right sides, I think the biggest tenants, biggest winners will be the tenant.

They will feel that they've got security in a market which at present they don't necessarily feel that they have.

Sounds positive.

Who are the losers?

Going back to my point of the changes to, to leasehold and freehold, it will be the freeholders who all of a sudden won't be able to get those large premiums based on marriage value that they were expecting to get.

And actually the ultimate losers off of that can also be others.

So if those investors in those properties are, say, pension funds, ultimately pensions are going to suffer.

If you were going to do, if you were in charge, Michael Gemma, one at a time, what would have you done differently?

I think the point Gemma made about the removal of a landlord's ability to offset its mortgage interest against its rental income, I think that if they were able to introduce that, even if it's in staggered terms, I think would make a massive difference and make it a much more attractive field and environment for landlords, professional landlords, to come in and actually do a good job.

And the point that's been stressed a number of times here, the act that is coming in place, the rent is right at it won't impact good landlords dramatically.

Good landlords are fantastic, good tenants are fantastic.

So if we can promote that and get good landlords into that market, I think it'll be a win win for everyone.

What do you think the biggest flaw is in this, Gemma?

In all of the changes?

I think that they haven't necessarily thought about all of the unintended consequences.

So all of the properties at the moment that are possibly going to flood the market as a result of landlords no longer wanting to own property and rent it out, I think they've not necess.

Well, I'm sure they will have thought about that, but I think that is going to be a big unintended consequence of all of this.

There's a shift, there is going to be consequence, effectively and there will be opportunity and there will be winners and losers, I guess.

I think that's been brilliant.

I think we'll do a little game, I think of let's do a business, all property.

Anything else, Anything else to anything you feel you've missed.

I think you've given a really nice overview there.

Obviously.

Any questions, you know where to find Michael Chema.

So please hold the paddle up.

Clearly say business or.

And give us, give us your reasoning.

So here we go.

You ready?

You clear?

Lovely.

Ready.

The UK is finally fixing its broken property system.

Go business.

Okay, good, we've got it, We've got a difference.

Why do you think it's bs?

I think I agree with you.

I think that the actual problems are about how long it takes the fact that people can suddenly come in and gazump a previous offer and all of a sudden you're back to square one.

I think we just need to have a much more frictionless way of dealing with especially residential conveyancing.

I was shocked when I saw the level of these reforms that.

That's not being dealt with as that is the one that people always go on about.

You guys are crazy in what are you doing it for?

But Michael.

Well, I, I think that these are positive signs and show a willingness to, I suppose, modernize a system that hasn't really been seen to or progressed in decades.

I think anything that leads to a better understanding as to how people hold properties.

If we can shift away from leasehold demises which are opaque, perhaps in house service charge and ground rent is collected or the consequences of that that to a much more easily understood common hold system which as you say is.

It's a, a very ideal scenario when you just hear it described and actually you do wonder why it hasn't.

So if we can move towards that, I think it'd just be for the benefit of everyone involved.

Very nice.

Leasehold is effectively dying.

Business or bs?

It's not dying.

I thought we were getting rid of this old.

Oh, I'm left to go with business.

I.

Okay, go ahead.

Well, I, I feel that just looking at the wording and the proposals that have been put in place.

Fine.

It hasn't taken off.

So maybe that's going to counter the argument.

But it's again showing the direction we want to work towards.

That's why I say BS because I'm a cynic.

We have 20 buildings so far that use common hall.

So I just think, I just think we do not, not accept change quickly and I don't see it.

If you force it upon them and actually make it a compulsory form of.

Ownership, then let's see if it happens.

It's really hard to accept change.

My, my wife moved where the plates are in our kitchen.

I'm still struggling with it.

A year later, I still, and I, you know, we need to discuss me.

And my wife, we're creatures of habit and I feel like if we have a full change to common hold, we may get another situation like we did 75 years ago where half of the property lawyers will receive retire.

Yeah, well, hang in there.

Yet renters are the big winners here.

Business or business.

Okay, nice.

I think so.

Yep.

I think so.

Big up the renters.

Poor them.

This will reduce housing supply.

No.

Yes.

I think debate.

I like this.

I like this.

I think this is to agree on anything.

No.

Well, I think certainly in the short term.

It will reduce it.

Yeah, it will reduce it.

I said that.

What I said.

Yeah.

Rent.

The.

This will reduce housing supply.

I'm sorry, I think it will increase housing.

I got it the wrong word.

I actually meant that way.

I think it will increase housing simply because so many landlords I'm.

We're already seeing it, are serving Section 21 notices, trying to get their tenants out and looking to sell the properties.

So I think, yeah, apologies, I got.

It the wrong way around.

It's definitely.

It will increase housing.

Increasing housing supply, especially in the short term term.

Increasing housing supply.

To buy.

To buy.

Yeah.

So get your little eyes looking out there.

Little opportunities coming up for you perhaps.

And finally, this is good long term for the UK economy.

Being economists, I don't really know where.

To go with this one.

I think it makes no difference.

Yeah.

All right, well, let's do.

Let's do something different.

Let's do something different.

Buying a house with Bitcoin.

Not with our matter risk assessment.

You can't do it.

Can I do it?

You can do it.

Mitch Contraya did it.

Yeah.

No, you.

But you can do it.

But very few law firms will accept.

Bitcoin because you have to receive the money.

Will you?

Yeah, I don't know.

How does it work?

I mean, does it go.

Yeah, it's much more uncertain how these monies are generated, whether it's pooled with others.

It's very, very shadowy.

I suppose we would have to receive the Bitcoin as a law firm acting on behalf of the seller.

And then the Purch solicitor would also have to accept us transferring it in Bitcoin and you've got the change in value between one day and another.

And I just don't know logistically how that works.

So.

Okay, very good.

Yeah.

Thank you, Michael and Gemma, always, always a pleasure.

So this isn't just a tweak, this is a reset.

More rights, more control, more complexity.

Well, some of that now, some of that later.

Maybe, maybe it's not happening.

And like most big reforms, the intention might be clear, but the outcome still very, very much up for debate.

But I hope we've given some decent clarity here.

So thank you.

Tune in.

Tune in to another business without bs.

That has been this week's episode.

CIAO.