Industry welcomes Government’s sweeping reforms to leasehold home ownership
Government has revealed radical changes to many aspects of leaseholds including ground rents, extensions and retirement properties.
Estate agents have welcomed this morning’s announcement by the government that it is to reform leaseholds and release 4.5 million home owners from its ‘bureaucratic, burdensome and expensive’ clutches.
Owners of leasehold houses will soon be able to extend their leaseholds by 990 years at a zero ground rent, removing the much-publicised attempts by some freeholders to sell properties with escalating ground rents and restricting extensions to 50 years, and putting them on a par with most apartment owners.
Also, ground rents on all retirement properties will also now be restricted to zero for all new – but not existing – retirement properties.
The government is also to make it fairer and cheaper to extend leases or convert them to freeholds, including capping the ground rent costs, abolishing the concept of ‘marriage values’ that often costs leaseholders tens of thousands of pounds when extending a lease, and establishing a Commonhold Council.
“The issue of escalating ground rent on leasehold homes has been a long-term scandal which has left many owners trapped and unable to sell their houses,” says Mark Hayward, Chief Policy Adviser at Propertymark (pictured)
“Over a million home in the UK are sold through a leasehold, and this new legislation will go a long way to help thousands of homeowners caught in a leasehold trap.
“But while we welcome the Government’s initiative to reduce ground rents to zero for all new retirement properties, we would argue this needs to be extended to all retirement properties to create a level playing field.
“Event fees remain a hugely contentious issue which many consumers still don’t understand so we need as much clarity and transparency as possible.”
The leasehold changes have been welcomed as a welcome ‘first step’ by the Law Commission, which recently published a ground-breaking report into the failings of the leasehold system.
Housing minister Robert Jenrick says: “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.”