Leasehold changes set to benefit up to 4.5 million people
The government has recently announced that it plans to give leaseholders the right to extend their lease to 990 years. Currently houses occupied under a lease can only extend their lease once for 50 years, whilst flat leases can be extended as often as required, with a zero ground rent for 90 years.
Furthermore, the Government has said that ground rents should be set to zero for new leases and that these provisions should also apply to leasehold properties built with the retirement sector in mind.
This move follows some high profile cases where some leasehold properties had been sold with clauses that would see ground rents rise dramatically in future years.
There are costs associated with extending a lease but the Government has indicated that it will change the way these are calculated with the ‘marriage value’ (the potential profit a lease extension might bring, being shared with the freeholder) likely to be abolished.
The move has been broadly welcomed by those bodies lobbying for change.
Harshinder Hundal – Pictons Property Partner also welcomed the changes:
“Leasehold is a common form of access to the property market. These changes are set to remove some of the downsides associated with leasehold purchase and will likely add additional confidence in the leasehold property sector. It will not remove the need for a thorough review of a leasehold agreement and guidance from an experienced property law specialist is very important.”
Those interested in acquiring or selling a leasehold property should contact Harshinder Hundal whilst those looking at extending a lease should contact Helen Searing
T: 0800 302 9448