There has been a long-standing stigma about buying a leasehold property, as opposed to a freehold, due to the dominance freeholders have over ground rent and other surplus charges. I welcome the news that millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent.
Today’s measures come as part of the biggest reforms to English property law for 40 years, fundamentally making home ownership fairer and more secure. This is very much welcomed at a time when many people have been hit with a lot of uncertainty.
Under the current law, many people face high ground rents which, combined with a mortgage, can make it feel like they are paying rent on a property they own. Freeholders can increase the amount of ground rent with little or no benefit seen for those faced with extra charges. It can also lengthen and lead to increased costs when buying or selling the property.
Today’s changes will mean 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
For some leaseholders, these changes could save them thousands, to tens of thousands of pounds.
Housing Secretary, the Rt Hon Robert Jenrick MP, said on the 7th January 2021:
“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.
“These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”
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.
To read further please visit: https://www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes
