Anticipating Leasehold Law Reforms
The forthcoming Leasehold Reform Bill promises to bring significant change to leasehold law across England and Wales.
The King’s Speech on 7 November 2023 set out Government plans for the coming year and provided further information on what impact these changes might have on leaseholders.
At Ashtons Legal LLP, we are committed to navigating you through these upcoming changes and providing you with the information and support you need.
Understanding the difference between Freehold and Leasehold
There are two types of property ownership: leasehold and freehold.
Freehold ownership is for an unlimited period of time and provides full control over the property and management of communal areas, with no ground rent or service charges being payable.
With Leasehold ownership, the land is ultimately owned by the freeholder. The freeholder provides a lease of the property to the leaseholder, which gives them ownership rights for a defined term. At the end of that term, the property reverts back to the freeholder. The leaseholder will have rights to use communal areas and will usually have to pay a ground rent and service charge.
The upcoming Leasehold law changes: What to expect
The key elements of the proposed leasehold law reforms are as follows:
Ban on leaseholds for newly built houses
The new legislation seeks to eliminate leaseholds for newly constructed houses, excluding flats and exceptional circumstances. This aims to put an end to the fees that have been long associated with such properties.
Ground rent caps
Existing ground rents are set to be capped at a minimal ‘peppercorn’ rate. Historically, a ‘peppercorn’ ground rent often meant a rent that was of nominal or low value. This move will offer significant financial relief to leaseholders, building upon existing caps introduced for properties sold after June 2022.
Lease extension revolution
The standard lease extension term is expected to increase from 90 years to an impressive 990 years. This change will provide leaseholders with greater freedom to manage their properties and secure their long-term interests.
Understanding Leasehold costs
If you are considering purchasing a leasehold property, it is crucial to be aware of the associated costs. Leasehold ownership often comes with obligations, including payment of service charges and ground rents. Understanding these costs is vital for responsible property management and financial planning.
A focus on fixed-fee Leasehold Extension services
Central to the leasehold reform is the extension of the term of the lease. Ashtons Legal offer a fixed-fee service on leasehold extensions to support you through this process. We can also assist you in resolving any leasehold disputes you may encounter.
Contact our property dispute resolution solicitors today
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