What Does Leasehold Reform Have in Store?
What Does Leasehold Reform Have in Store?
On 30 June 2022, we saw the first of the proposed leasehold reforms come into force with the Leasehold Reform (Ground Rent) Act 2022. The Act abolished ground rents on all new long leases of flats and houses so that only a “peppercorn” (zero) rent is payable on all new leases.
There are further proposed phase of the Reform which will include: –
- Giving leaseholders the right to extend their lease to 990 years rather than only 90 years via the statutory route
- Introducing a lease extension premium calculator whereby lessees will be able to calculate the premium for their lease extension online and thus preventing them from having to go to the expense of negotiating the premium with the freeholder
- Abolishing the current marriage value payable when a leaseholder’s current lease is below 80 years which substantially increases the lease extension premium.
- Enabling leaseholders with long leases to buy out the original ground rent without having to extend the term
Although the Government has outlined that they are committed to introducing further reforms, there is not as yet a timetable for when these reforms may come into force and therefore a leaseholder with a short lease may be well advised not to wait to extend their lease for this reason.
This article is intended for general information only, applies to the law at the time of publication, is not specific to the facts of your case and is not intended to be a replacement for legal advice. It is recommended that specific professional advice is sought before relying on any of the information given. © Jonathan Lea Limited 2023.
