The UK Government announced yesterday (7 January 2021) that leaseholders will be given the right to extend their leases by a maximum term of 990 years at zero ground rent. This announcement forms part of the biggest reform of English property law for almost 50 years in an attempt to make home ownership more equitable and secure.
Under the current law, many long leaseholders face high ground rents, which, combined with a mortgage, can make it feel like they are paying rent on a property they effectively own. This is due to the fact that freeholders can increase the amount of ground rent with little or no benefit seen to those faced with extra charges. Lobbyists have been campaigning for years for the Government to effect this change.
Additional headlines from the announcement by the Housing Secretary, Robert Jenrick, include:
Legislation will be brought forward in the upcoming session of Parliament to set future ground rents to zero. This is the first part of seminal two-part reforming legislation in Parliament. A response to the remaining Law Commission recommendations, including commonhold, is expected in due course.
Please follow the link for access to the full Government press release.
* The commonhold model is widely used around the world and allows homeowners to own their property on a freehold basis, giving them greater control over the costs of home ownership, and whereby blocks are jointly owned and managed, meaning when someone buys a flat or a house, it is truly theirs and any decisions about its future are theirs, too.