The Government has recently announced that millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent as part of the biggest reforms to English property law for many years
What are the changes?
Under the current law, many people face high ground rents and Freeholders can increase the amount of ground rent with little or no benefit seen to the owners of the property who hold the lease. It can also create problems and lead to increased costs when buying or selling the property.
Leaseholders of houses can only currently extend their lease once for 50 years with ground rent. This compares to leaseholders of flats who can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years. These changes mean both house and flat leaseholders will now be able to extend their lease to a new standard of 990 years with a ground rent at zero.
These changes will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder.
A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder. The Government will soon be introducing an online calculator to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.