Last week saw an announcement by the government to change the way leaseholders will be treated when extending their leases. The change, if passed through parliament and given royal assent, will allow millions of leaseholders, the right to extend their leases by 990 years at a zero-ground rent. This potentially could save homeowners thousands of pounds.
Housing Secretary Rt Hon Robert Jenrick MP 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.”
This change, brought on by the Law Commission’s recommendations, is being hailed as one of the biggest reforms to the English property law for decades. The government have gone on to say that it will “fundamentally make home ownership fairer and more secure.”
At present freeholders, who own both the physical land that a flat or house sits on, as well as the building, can charge a leaseholder (the home owner who solely owns the property) high ground rents, that bear no benefit to those incurring the cost. In fact, it can be a considerable burden both in time and money to the homeowner when selling a property.
Also announced is a proposed “Commonhold Council”, which aims to help homeowners and the property market in general, deal with the change to “commonhold”. Commonhold is widely recognised and used around the world, to allow the homeowner to own their property as freehold, thus allowing them complete control over costs.