Comment and insight from our property experts.
What's on the horizon in leasehold reform?
- AuthorBukola Obadun-Craigs
The Government has confirmed that legislation will be bought forward allowing leaseholders to extend their leases by a maximum of 990 years at zero ground rent, turning away from the 50-year lease extension with ground for leasehold houses and a 90-year extension at a peppercorn ground rent for flats. Thus, an equal footing for all when extending leases.
Who will benefit?
It is expected that around 4.5 million leaseholders will benefit from the reforms saving leaseholders “thousands, to tens of thousands of pounds”.
A few of the key announcements include:
- The abolition of “prohibitive costs” such as ‘marriage value’.
- Leaseholders will be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’.
- The introduction of an online calculator, allowing leaseholders to check how much it will cost to buy their freehold or extend their lease.
- A Commonhold Council, consisting of leasehold groups, industry, and Government to set the wheels in motion for the anticipated widespread take up of commonhold as an alternative to leasehold.
The reforms have also confirmed that the Government’s restriction of ground rent will also apply to retirement properties, protecting the elderly.
Although, at this time, we are still unsure as to when the reforms will become legislation it is clearly on the horizon.