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Housing Secretary Robert Jenrick has announced the Government plans to introduce leasehold reforms to improve the rights of leaseholders. When the legislation is introduced it will mean that millions of leaseholders will be given the right to extend their lease by up to 990 years at zero ground rent.
Currently, leaseholders of houses are only able to extend their leases once for 50 years with a ground rent. Leaseholders of flats are able to extend as often as they wish, often at a 'peppercorn' rent for 90 years.
The changes announced by the Government mean that any leaseholder who chooses to extend the lease on their home will no longer pay ground rent to the freeholder. This could potentially mean savings of tens of thousands of pounds.
A cap is to be introduced on the ground rent that is payable when a leaseholder chooses to extend their lease to become the freeholder and an online calculator will make it simpler for leaseholders to find out how much it would cost to buy their freehold or extend their lease. They are also abolishing prohibitive costs such as 'marriage value' and have set the calculation rates to ensure that this is fairer and more transparent.
Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying a 'development value'.
The Government is also ensuring that the above changes apply to retirement leasehold properties so that elderly purchasers have the same rights as other homeowners.
The reforms aim to provide fairness to the 4.5 million leaseholders in the UK. If you own a leasehold property and/or you are thinking about buying, selling or enfranchising, our team can help. Please contact Kezia Morgan firstname.lastname@example.org or call us on 01332 600005.