Earlier this year a new government reform meant that millions of leaseholders will be given the new right to extend their lease by 990 years, with the changes said to be able to save households from thousands to tens of thousands of pounds.
Under the new reform, the elderly will also be protected by reducing ground rents to zero for all new retirement properties.
The new measures which were announced by the Housing Secretary Robert Jenrick on 7th January (2021) come as part of the biggest reforms to English property law for 40 years and will fundamentally make homeownership fairer and more secure.
Currently, under the existing leasehold property laws, many homeowners face high ground rents, which when combined with a mortgage, can make it seem like they are forced to pay rent on a property they own.
Housing Secretary Rt Hon Robert Jenrick MP 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 homeownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners.”
“These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”
What are the new Enfranchisement procedures?
The updated reforms to the enfranchisement procedure announced by the Government include:
- Both house and flat leaseholders will now be able to extend their lease to a new standard 990 years with a ground rent at zero.
- A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder.
- 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 set the calculation rates to ensure this is fairer, cheaper and more transparent.
- Further measures will be introduced to protect the elderly. The government has previously committed to restricting ground rents to zero for new leases to make the process fairer for leaseholders. This will also now apply to retirement leasehold properties (homes built specifically for older people), so purchasers of these homes have the same rights as other homeowners and are protected from uncertain and rip-off practices.
- Leaseholders will also be able to voluntarily agree to a restriction on the future development of their property to avoid paying ‘development value’.
Legislation will be brought forward in the upcoming session of Parliament, to set future ground rents to zero. This is the first part of seminal two-part reforming legislation in this Parliament.
Leasehold Enfranchisement Solicitors
Leasehold enfranchisement is the process you go through to purchase the freehold of a leasehold property. Parker Arrenberg property solicitors are experts in the field of leasehold enfranchisement and have the expertise to help you on a wide range of matters including:
- Collective enfranchisement (where a group of tenants wish to buy the freehold together)
- Purchasing the freehold of your residential property
Our dedicated property team have been providing leasehold enfranchisement services in South East London and across the UK to clients for many years. Delivering the highest level of client care is always at the forefront of what we do, and our property team fully understands the importance of ensuring our clients receive efficient, and cost-effective legal services.
Contact Our Property Solicitors
If you would like to discuss any questions raised in this article or you would like to talk to one of our specialist property lawyers regarding a leasehold matter, please do not hesitate to get in contact with one of our property team. Call us on 020 8695 2330, email us at email@example.com or make an online enquiry and we will call you.
Please note that this article is not intended as legal or professional advice. This is a general news article only and updates to the law may have changed since it was published