Government announces new Leasehold reforms
The Housing Secretary has announced that leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent.
Currently, leaseholders are paying high ground rents alongside their mortgage. Freeholders can increase the amount of ground rent on regular review dates and it can also make the process longer when the owner hopes to sell. If the owner wishes to extend their lease at the moment and reduce the ground rent, this can usually only be done for a set time period and they would also face high charges to do so.
Following the government’s announcement, any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder. Further measures will be introduced to protect the elderly. Ground rents will be restricted to zero on all retirement leasehold properties.
The government is also now establishing a Commonhold Council - a partnership of leasehold groups, industry and government - that will prepare homeowners and the market for the widespread take-up of commonhold. This allows owners in blocks of flats to own and manage the block jointly, giving them greater control over cost and decision making about the home they own.
If you are considering buying or selling a leasehold property or would like to extend your lease, why not give our property team a call on 01606 74301?