The Ministry of Housing, Communities & Local Government has announced proposed changes to the laws relating to leasehold ownership in England and Wales.
The announcement was made in January 2021 and followed the recommendations issued by the Law Commission last year. For a number of years, there have been calls to reform the law on leasehold properties and its restricted lease extensions and unfair ground rents.
The good news is changes are now on the horizon and should soon become law, although this may take some time.
What Are The Proposed Changes To Leasehold Law?
The controversial residential property laws are set to be changed in a bid to put leaseholds on an equal footing with freeholds. There are approximately 4.5million leaseholders in the UK and they are all set to benefit from the reforms, saving them thousands in ground rent and adding value to their property through the 990-year lease extension.
The main proposals include:
- The right to extend the lease by 990 years
- Zero ground rent
- Retirement properties to benefit from these changes too
- A new online calculator that lets leaseholders check how much to buy their freehold or extend their lease
- The establishment of a Commonhold Council to lead the way for commonhold ownership
Commonhold ownership is set to be an alternative for those in multi-occupancy properties, usually flats. Unlike with leaseholds that lose value as the lease reaches its expiry date, commonhold properties will hold their value.
One of the most eye catching of the Government’s proposals is the addition of “Marriage Value”. If enacted this would save Tenants a lot of money especially when buying the Freehold or extending, where the Leaseholder’s Lease has less than 80 years to run. There are a number of other interesting proposals which may affect Leaseholders.
Helping You With Your Leasehold Property
It is unknown how quickly the leasehold reforms will progress through parliament and we will keep you informed of developments.
When the reforms become law, it’ll be good news for leasehold homeowners. What exactly it means for developers and builders is unclear at the moment but will be detailed in the legislation in due course.
To speak to one of our specialist solicitors about your leasehold property or the planned changes to leasehold property law, please contact us at our Chorlton office on 0161 860 7123, Manchester office on 0161 839 0092 or at our Failsworth office on 0161 681 4005 or email firstname.lastname@example.org or email@example.com