The Government have today announced the first stage of their proposals to reform the leasehold property market by shaking up the process by which leaseholders can extend their leases. The Government intend to regulate the position between leasehold house owners and leasehold flat owners by allowing all leaseholders to extend their leases for 990 years with no ground rent payable.
It is also proposed that the mechanism for obtaining an extended lease is simplified. This is to be achieved by abolishing prohibitive costs such as “marriage value” and changing the calculation rates to ensure that it is fairer, cheaper and more transparent. The Government is planning on introducing an online calculator so that leaseholders can easily establish how much the premium to be paid to the freeholder for extending their lease will be.
As always, the devil will be in the detail and, only once we have the draft legislation will we be able to fully assess the impact of these changes and, indeed, whether they will have the desired effect of simplifying the process. However, if you have any queries as to how these changes may impact you, please contact our property litigation team who will be happy to assist.
The full details of the Government proposals can be found here.
