10 February 2021
The government announce reforms to make it cheaper and easier for leaseholders to buy their homes.
Under the proposals millions of owners of leasehold properties will be given the right to extend their lease by 990 years at zero ground rent.
The changes have been proposed to help make home ownership fairer and more secure. At present leaseholders can face high ground rents, which can be an extra financial burden on top of having to pay a mortgage.
Under the current rules leaseholders of flats can extend their lease for 90 years, whilst house owners can extend their lease for up to 50 years. Leaseholders who do wish to extend their lease can also face high charges to do so.
The government also wish to introduce a cap on ground rent payable when a leaseholder chooses to extend their lease or buy the freehold. There will also be an online calculator that will allow leaseholders to work out how much it will cost to extend their lease or buy the freehold.
The other change relates to ending the so-called ‘marriage value’ – this currently applies to properties where the lease has less than 80 years left on it, and is charged on the basis that holding the leasehold and freehold together is more valuable.
The government will also establish a ‘Commonhold Council’, which a partnership is involving leasehold groups, industry leaders and the government, in order to prepare homeowners and the market for the adaptation of commonhold.
The commonhold model allows homeowners to own their property on a freehold basis. For example, under the commonhold model if you were to purchase a flat within an apartment block, the block would be jointly owned and managed by the residents. Giving you greater control of the management and maintenance costs of the building.
For further information on the reforms please visit the gov.uk website.
