Help is on its way for leaseholders wanting to buy freehold
The government estimate that there are 4.2m leasehold residential properties (one-third houses and two-thirds flats) in England, and around half of these are on leases with less than 80 years remaining. Ground rents average £370 per year.
Last year, the-then Communities Secretary, Sajid Javid asked the Law Commission to look at ways of making buying out a leasehold to gain the freehold easier, faster and cheaper. This was in response to a rising tide of public concern about the high prices some homeowners were being charged and the rates at which some ground rents could escalate.
One of the proposals that it has put forward is to introduce a simple formula that would mean eligible leaseholders would pay just ten times their current ground rent, or 10% of the value of the property, to convert their property from leasehold to freehold. It also proposes removing the current requirement that leaseholders must own the lease on their property for a minimum of two years before they can buy their freehold.
The consultation on this complex area of property law is ongoing, and any new rules are unlikely to come into force before next year.
…a rising tide of public concern about the high prices some homeowners were being charged and the rates at which some ground rents could escalate.