2021 Leasehold Reforms

Finally good news for 2021 surrounding Leasehold reforms!

There has been many talks at parliament regarding the issues surrounding leasehold properties for the past few years.

The recent changes announced by the government on Thursday 7th January 2021 will mean;

• Leaseholders will be given the new right to extend their lease by 990 years and will no longer pay any ground rent to the freeholder. For some leaseholders, these changes could save tens of thousands of pounds.

• A cap will be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder.

• The Government is abolishing prohibitive costs like ‘marriage value’ and set the calculation rates to ensure this is fairer, cheaper and more transparent.

• The elderly will also be protected by reducing ground rents to zero for all new retirement properties, and some are pushing for this to be across all retirement properties, not just new ones.

Professor Nick Hopkins, Commissioner for Property Law at the Law Commission said:We are pleased to see government taking its first decisive step towards the implementation of the Law Commission’s recommendations to make enfranchisement cheaper and simpler. The creation of the Commonhold Council should help to reinvigorate commonhold, ensuring homeowners will be able to call their homes their own.

It has been estimated there are at least 4.3 million leasehold homes in England alone.

Read the full Government announcement here: https://www.gov.uk/government/news/government-reforms-make-it-easier-and-cheaper-for-leaseholders-to-buy-their-homes