A better deal for leaseholders could be on the horizon

A better deal for leaseholders could be on the horizon

Following recent concerns surrounding leasehold property, The Law Commission has suggested a number of reforms that could potentially ease the difficulties with leaseholders buying the freehold title to their property.

The proposed reforms include making enfranchisement quicker, easier and cheaper. This includes limitations and restrictions, like living in the property for the minimum period of two, before a claim can be made.

The Law Commission would also like to increase the rights leaseholders have in the process of purchasing the freehold. They would also look to create a unified approach to the process for both houses and flats.

Nick Hopkins, Law Commissioner Professor, has said:  “The current system is complex, slow and expensive and it’s failing homeowners. Many feel that they are having to pay twice to own their home.

“Our proposals would make it easier and cheaper to buy the freehold or extend the lease of their home, ensuring the system works for ordinary homeowners across the country.

“We want to hear views from across the spectrum on how this complicated area of law can be improved.”

Mark Hayward, Chief Executive of NAEA Propertymark, said: “Thousands of homeowners are stuck in leases across the country facing escalating ground rent, charges for making basic alterations and growing more concerned that their homes are unsellable.

“Our Leasehold: A Life Sentence? report, found that a third (31 per cent) of leasehold house owners currently trying to sell their homes are struggling to attract a buyer because they don’t own the freehold, and a quarter (25 per cent) have had interest from house hunters, but when they found out the property was being sold as a leasehold, they were deterred.

“Further, almost half (43 per cent) weren’t told anything about purchasing the freehold by the housing developer when they were buying the property. As a result of this, one in five (18 per cent) have actively tried to buy the freehold to make their property more attractive to prospective buyers, while 41 per cent are thinking about doing it – but it’s rarely straight forward or affordable.

“Helping those who feel trapped by their situation is a real challenge and we hope this process will result in a robust solution for all those affected and who are unable to sell their homes.”

Heather Wheeler, Housing Minister, stated: “The Government is committed to banning leaseholds for almost all new build houses and restricting ground rents to a peppercorn.

“It’s also unacceptable for leaseholders who want to buy their freehold or extend their lease to be faced with overly complicated processes and disproportionate costs.

“I welcome the Law Commission’s proposals that have the real potential to help those leaseholders who are having to deal with these outdated practices.”

Whilst a balance needs to be struck between ensuring the rights of the landlord and creating a fair deal for leaseholders, the recent suggestions will be welcome reading for the thousands of leaseholders that remain worried about the rights they have to the property they own.

Do you think clarity around leaseholders rights will encourage more people to buy leasehold property?

 

 

Martin Parrin

Martin is a Senior Content Writer for Today’s Conveyancer, Today’s Wills and Probate, Today’s Legal Cyber Risk and Today's Family Lawyer Having qualified as a teacher, Martin previously worked as a Secondary English Teacher that responsible for Head of Communications. After recently returning to the North West from Guernsey in the Channel Islands, Martin has left teaching to start a career in writing and pursue his lifelong passion with the written word.

Leave a Reply

Your email address will not be published. Required fields are marked *