Leasehold reforms announced by Government
Published: 08/01/2021The Government has this week outlined measures to ensure leaseholders can extend their lease by a maximum of 990 years at zero ground rent. This is part of proposed reforms to make home ownership fairer and more secure.
These changes could save leaseholders significant sums of money as they would put a stop to freeholders increasing the ground rent. They will also allow house and flat leaseholders to extend their leases to a new standard 990 years as opposed to current rules which only allow a one-off 50 year extension for leases of houses and a 90 year extension for flat leases, albeit that flat owners can extend by 90 years as often as they wish.
This is good news for leaseholders particularly as escalating ground rents have been a controversial subject for some time. These can cause leaseholders problems when selling their home.
The Government also intends to introduce an online calculator to make it easier for leaseholders to see how much it would cost to buy the freehold or an extended lease.
The press release put out by the Ministry of Housing, Communities and Local Government on 7 January states that legislation will be brought forward in the upcoming session of Parliament to set future ground rents to zero. However there is as yet no timetable for the other measures and no details as to how the proposed reforms will be implemented.