Leaseholders Could Save Thousands Of Pounds With The Latest Property Reforms
At the start of January, the Government announced a series of leaseholder reforms. They are designed to help leaseholders to own their homes, while reducing the costs involved and making the enfranchisement process clearer and fairer. This could affect more than 4.5m leaseholders in the UK.
The changes mean leaseholders will now be able to extend their lease to a new standard 990 years with a ground rent at zero.
Under the current law, many leaseholders are paying high ground rents, which when added to a mortgage, can feel like they are paying rent their own property. Freeholders can increase the amount of ground rent with little or no benefit seen to the leaseholder. This can also lengthen and lead to increased costs when buying or selling the property, leading to further complications and stress for the leaseholder.
Currently, leaseholders of houses can only extend their lease once for 50 years with a ground rent, but leaseholders of flats can extend as often as they wish at a zero ground rent for 90 years. The new reforms will allow both house and flat owners to extend their lease to 990 years
Introducing the proposals, Housing Secretary, Robert Jenrick, said: “Across the country, people are struggling to realise the dream of owning their own home but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive. We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners”.
Officials said the changes could save leaseholders thousands of pounds, rising to tens of thousands of pounds for some.
The legislation will be brought forward in the upcoming session of Parliament.
If you are a leaseholder and are looking to extend your lease, don’t forget here at Barnes and Barnes, as RICS Registered Valuation Surveyors, our expert team can assess the value of your property. This valuation can then be used to calculate the amount you’ll need to pay your freeholder to add an additional number of years to your current lease term. For more information, please visit our valuations page or contact us to get a quote.