The Greatest Changes to Leasehold in 40 Years



Key Points

Houses and flats can now extend their leases by 990 years, at zero ground rent

Ground rent ban extended to retirement housing

Marriage value abolished and setting calculation rates for enfranchisement

A new Commonhold Council to be established

Legislation coming this Parliamentary session

Further legislation to follow for commonhold properties*

Robert Jenrick MP, the Housing Communities and Local Government Secretary announced sweeping reforms to leasehold, for houses, flats and retirement developments, with legislation coming this Parliamentary session. In addition, further legislation will follow, including for commonhold properties.
 
In 2020, the Law Commission published new reports surrounding leasehold enfranchisement, commonhold, and Right to Manage. The announcement released today is the Government’s response to the Law Commission reports, which is in reference to how to make purchasing the freehold of a property or extending a lease easier, simpler and cheaper for leaseholders and how best to pave the way for the widespread take-up of commonhold.
 
IRPM CEO Andrew Bulmer has provided the following comments “This is Government’s long-awaited first response to the Law Commission’s reports and heralds a multi-stage reinvention of tenure for flats in England; the biggest changes to leasehold law for decades. Stand by for more announcements on commonhold. IRPM professionals have long seen this coming and IRPM itself will be leading with all the essential training and learning materials for the exciting new world order.”

*The latest announcement from the Government around Commonhold is the culmination of years of consultation and is concerned with how to make leasehold work for the everyday person. This reference is fantastic for our industry, as the Commonhold debate has highlighted the value of replacing commercial freeholders with resident management companies and encouraging the management of buildings to be placed in the hands of the residents. Why is this extremely good for B-hive Property Solutions? Simply because resident management company directors, as lay people, need and want local agents to assist and help with the day to day management, particularly in a local, personal and tailored fashion, which in turn creates a new influx of opportunities for agents that specialise in working with resident management companies.

There were so many Carlisle property owners trapped by the old legislation where there property (mostly flats) had a short lease of less than 100 years and a prospective purchaser couldn’t get a mortgage, meaning these properties were rendered almost unsellable. Addresses that come to mind included Hodgson’s Court in the Lanes, Hebden Avenue, Greenacres in Wetheral, Newfield Drive to name but a few.

If you are effected by this and want any advice, please feel free to get in touch on 01228 53400 or email me at carlisle@northwooduk.com
 

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