Housing secretary Robert Jenrick has set out measures that will enable leaseholders in England to extend their leases by a maximum term of 990 years at zero ground rent.
This measure is part of what the government describes as the “biggest reforms” to English property law for 40 years. They seek to make home ownership “fairer and more secure”.
Currently, many leaseholders face high ground rents as well as their mortgage payments. The freeholder can increase the ground rents costs with little benefit to those living in the properties, the government explained, which can lead to increased costs when buying or selling the property.
The changes outlined by the government will mean that if a leaseholder chooses to extend the lease on their property, they won’t pay any ground rent to the freeholder.
Jenrick said: “Across the country people are struggling to realise the dream of owning their own home but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive.
“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.
“These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”
The government has also established a Commonhold Council, which is a partnership between leasehold groups, industry and government. It will prepare homeowners and the market for the widespread take-up of commonhold, a model that is used around the world. It allows homeowners to own their property on a freehold basis, giving them greater control over the costs of home ownership.
Blocks are jointly owned and managed, so when someone buys a flat, it is theirs.
Professor Nick Hopkins, commissioner for property law at the Law Commission said: “We are pleased to see government taking its first decisive step towards the implementation of the Law Commission’s recommendations to make enfranchisement cheaper and simpler.
“The creation of the Commonhold Council should help to reinvigorate commonhold, ensuring homeowners will be able to call their homes their own.”
The government’s reforms mean leaseholders of flats and houses will be able to extend their lease to a new standard 990 years with a ground rent at zero.
For more detail click here
