Terry Mills

Director and Head of Property

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Government Reforms to the Leasehold Regime

07/01/2021

In what is being heralded as the biggest property reform in English law for 40 years, the Government has today announced new improvements to the leasehold regime:
https://www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes

 

For anyone who wishes to extend the lease on their home or flat, leaseholders will have the right to extend their lease to 990 years at a zero ground rent. For those that wish to buy their freehold or extend their lease, an online calculator will be introduced to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.  The government is abolishing prohibitive costs like ‘marriage value’ and will set the calculation rates to ensure this is “fairer, cheaper and more transparent”.

Last year the Law Commission published reports on leasehold enfranchisement, Commonhold, and Right to Manage.  Today’s announcement is part of the Government’s response to those reports on how to make purchasing the freehold of a property or extending a lease easier, simpler and cheaper for leaseholders and how to pave the way for the widespread take-up of Commonhold.

Under the current system, too many leaseholders find the process for extending their lease or buying their freehold too complex, lacking transparency and prohibitively expensive. This package seeks to address this, by taking account of the legitimate rights of freeholders but addressing historic imbalance to ensure fairness for leaseholders. 

The announcement also includes removing a previously announced exemption for retirement properties. Restricting ground rents to zero is a basic matter of fairness, and removing this exemption will ensure that those who live in retirement housing benefit from the same reform as other leaseholders.

For help with your Lease needs please contact the property team here