New reforms for leaseholders are biggest in decades
Earlier this month, the Government revealed plans to introduce a new law that hoped to make home ownership fairer, by giving leaseholders the right to extend their lease by a maximum of 990 years at zero ground rent.
Bringing down high rents
Housing Secretary Robert Jenrick made the announcement on 7th January that would end high ground rents and offer a lifeline to 4.5 million leaseholders tens of thousands of pounds, in a measure that was termed the biggest revolution to the English property market for four decades.
Currently, the law permits freeholders to increase ground rents on properties with little or no benefit seen to those faced with the charges. Charges can also be implemented without limits, leaving many leaseholders in a position where they are paying extortionate ground rent in addition to a mortgage, on a property that they own.
The changes announced by Jenrick on 7th January will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder, enabling those who dream of fully owning their home to do so without cumbersome bureaucracy and additional, unnecessary and unfair expenses.
Extending leaseholds forever
What's more, the changes are so significant that not only could leaseholders save tens of thousands of pounds, they could effectively extend their lease forever, up to 990 years. It could also add value to properties, especially where leases are medium term, say 50-70 years, and people are trapped by dwindling property costs, unable to raise the funds to renew a lease.
While reforms are a step in the right direction, the area of the law remains complex. If you would like some legal advice relating to a property purchase or a leasehold extension, contact the Property Team at Downs Solicitors to see how we can help.