In England and Wales, part of UK governments plan is to make changes to leasehold home ownership. This will allow greater control over how leasehold properties are managed. The reforms have been published in draft ‘Leasehold and Commonhold Reform Bill’.
Impact on Leasehold Property Costs and Homeowners
This could lead to leaseholder’s saving yearly costs associated with a leasehold property. Ground Rents were abolished in 2022 on new residential properties but remained on existing leasehold homes and flats.
Problems with Existing Leasehold Agreements
There are also issues with existing leases, where the ground rent doubles or increases by RPI inflation at intervals which can make a property difficult to sell or be mortgaged.
Government Proposal to Cap Ground Rent at £250
The government proposal’s plans to cap ground rent at £250.00 and reduce ground rents to a peppercorn, effectively zero after 40 years. The bill will now be reviewed by MP’s before reaching parliament. It is predicted the cap would come into place in 2028.
We will provide further updates when further information is available.
The contents of this post do not constitute legal advice and are provided for general information purposes only ■
