Beware of Future Leasehold Reforms
Future Leasehold Reforms make it difficult for those who are imminently looking to sell or re-mortgage. The Housing Secretary announced in January 2021 that there is to be a reform of the lease extension process. However, the Government statement from January 2021 is not entirely clear and a timeframe has not been confirmed which leaves lessees in a difficult position as to how they proceed.
Currently, under the provisions of the Leasehold Reform Housing and Urban Development Act 1993 (as amended), a lessee who has owned the property for two years has a statutory right to a ninety-year lease extension at a Peppercorn ground rent. For this lease extension, the lessee is required to pay the freeholder a premium along with their legal and valuation costs.
Whilst we expect that legislation surrounding lease extensions may change with a better solution to lessees, the timeframe and details of this are unknown. We also expect any reform which drastically alters the premium which should be paid may be subject to multiple legal appeals. As a first stage to this, the Government have put forward the Ground Rent Bill in May 2021 however this only deals with new leases. Currently, we recommend that any lessee consider the possible reform and exercise a degree of caution in how they proceed.
Sadly, many people who are imminently looking to sell or re-mortgage will not be able to wait for any reform.
If you need to extend your lease soon, we highly recommend seeking professional advice to fully understand your lease terms, negotiate to minimise costs and help take the stress out of the situation.
We provide friendly, professional lease extension advice to agree a settlement to your lease negotiations. We specialise in and act on behalf of numerous Freeholders and Leaseholders to provide valuation reports and negotiate terms on flats with short leases under the provisions of the Leasehold Reform Housing and Development Act 1993. We also provide advice on Collective Enfranchisement.
Drawing on our extensive experience we can confirm if the price and terms offered are reasonable. We can also advise on whether it is advantageous to both parties to conclude the transaction by agreement, especially with regard to the term, the ground rent and review provisions.
If a freeholder or leaseholder is being unreasonable then we are able to advise whether to take the case to the First Tier Tribunal (Property Chamber) and we would be able to represent you in this regard. However, our aim is always to try to resolve matters as quickly and efficiently as possible.
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Contact: Greg Rowland.
DIRECT LINE: 01494 689616
MOBILE: 07843 054770