The government asked the Law Commission to produce proposals to simplify the leasehold process and provide a fairer deal for leaseholders.
What is leasehold ownership?
For the purposes of these reforms leasehold is where you take a long lease of a house or flat and rent from a landlord at a low or nominal rent. You do not actually own the land any anything on it. This is different from a freehold, where the owner has full complete ownership of the piece of land and whatever is built on it.
What are the proposed reforms to the leasehold sector?
The proposed changes include:-
- leaseholders being able to extend their house or flat lease by a maximum of 990 years at a zero ground rent. This could save leaseholders thousands as many currently face spiralling fees and charges.
- the removal of marriage value – This is the increase in the value of the property following the completion of a lease extension, reflecting the increase in the market value of the property due to the longer lease.
Housing minister Robert Jenrick said the new laws are being introduced to banish the ‘scandalous pitfalls of leasehold’ and ‘put fairness back at the heart of the housing system’.
The proposals made by the Law Commission will ultimately be fairer for leaseholders.
Should you have any queries in relation to the extension of your lease, please do not hesitate to contact our property team on 01904 624903.
Note that they will NOT affect commercial leases of business premises or short term residential lettings.