Government announces changes to long leasehold lease extensions
Rachel Garton and Jane Curtis-Tanton, 4th February, 2021
In England millions of homeowners currently own their home on a leasehold basis.
Current rules state that leasehold owners of houses can only extend their lease once for a period of 50 years with a ground rent payable. Leasehold owners of flats however can extend their lease multiple times for a period of 90 years with zero ground rent.
The Secretary of State for Housing, Communities and Local Government, Robert Jenrick announced on 7 January 2021 that the government is planning to introduce new legislation. Jenrick states:-
“Across the country people are struggling to realise the dream of owning their own home but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive. We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners. These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”
The changes that are due to be made will allow all leasehold owners to extend their lease to 990 years with zero ground rent which will potentially save long leaseholders thousands of pounds and provide them with long term reassurance about their property.
There is currently no exact date for these changes to come into place, but the government states that it hopes to legislate as soon as possible.
We will keep you updated.
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