A better deal for leaseholders
By Kara Nicholls, Paralegal, Residential Conveyancing
In 2017 the Government announced their plans to tackle issues surrounding leasehold properties and more recently the Law Commission published their response.
Millions of leasehold homeowners will be given the right to extend their leases to 990 years with zero ground rents under major government reforms to property law in England and Wales. The leasehold system as it stands has been subject to controversy as many property owners who hold the leasehold interest in the land have been penalised with high ground rent payments, extortionate costs to extend the lease or buy the freehold interest and high costs when it comes to sell the leasehold interest.
Under current law, owners of leasehold houses can only extend their lease once for a maximum of 50 years with extensions including a ground rent, whereas owners of leasehold flats can extend as often as they wish with zero ground rent for 90 years. The new plans mean both flat owners and house owners will have equal rights to extend their lease up to 990 years and homeowners can now calculate the amount it would cost to do this.
Commissioner for property law, Professor Nick Hopkins said:
“The leasehold system is not working for millions of homeowners in England and Wales. We have heard how the current law leaves them feeling like they don’t truly own their home.
“Our reforms will make a real difference by giving leaseholders greater control over their homes, offering a cheaper and easier route out of leasehold, and establishing commonhold as the preferred alternative system. The reforms will provide a better deal for leaseholders and make our homes work for us, and not somebody else.”
The recent changes will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder. This will help leaseholders who have potentially been trapped and unable to sell their home due to the high costs of a leasehold.
If you own or are considering purchasing a leasehold property and would like a free initial consultation with one of our specialist Conveyancing team, contact us on 01244 356 789 or email firstname.lastname@example.org.
Please note: This is not legal advice; it is intended to provide information of general interest about current legal issues.