New proposals could allow more leaseholders to own the buildings they live in
The Government has unveiled radical new plans to allow more leaseholders to own their buildings. It comes after several measures to approach building safety following the cladding crisis - which has left many leaseholders in the lurch.
Many have criticised the current system as outdated and unbalanced, as only some residential leaseholders in England and Wales can choose to buy their building outright. This can be either through enfranchisement, or by taking over the management of their building, in what is known as a “right to manage”.
Plus, there are further barriers if shops and other similar properties take up over 25% of the total floorspace. In those cases, leaseholders cannot collectively bid to take control of their building.
In a consultation which is running from now until 22nd February, homeowners are being invited to give their views on proposals from the Department for Levelling Up, Housing and Communities to allow more leaseholders in mixed-use buildings to take over the ownership of their premises.
New proposals include increasing the shop-occupier floorspace to 50%, which would give the resident more control over how shared facilities are run, as well as a say in maintenance costs. Other proposals aim to make it cheaper for leaseholders to buy the freehold, and / or reduce the cost of a collective buyout of the building.
This could mean thousands of leaseholders could be able to buy the buildings they live in much more easily.
What's more, there could be further measures introduced, such as the abolishment of the marriage value - which we wrote about last year - as well as the cost of enfranchisement reduced.
It is hoped the proposals will help to create a more modern, balanced and fairer housing system that is fit for the future. The latest consultation adds to the Government's recent reforms to the leasehold system that come into effect later this year, putting an end to ground rents and lease extensions for most new residential leases.
The government is also calling for views on changes to support greater use of commonhold, as an alternative form of homeownership to leasehold – including for those in Shared Ownership schemes in England. All feedback from the consultation will be received and carefully considered before any final policy decisions are put in place, helping to form the next stage of the government’s comprehensive programme of reforms to the leasehold and commonhold systems.
The consultation can be found here.
In the meantime, if you have any queries relating to a leasehold purchase contact the property team to see how we can help.