Leasehold

(asked on 18th March 2021) - View Source

Question to the Department for Levelling Up, Housing & Communities:

To ask the Secretary of State for Housing, Communities and Local Government, when he plans to bring forward legislative proposals to implement the findings of the Law Commission on the leasehold market.


Answered by
Eddie Hughes Portrait
Eddie Hughes
This question was answered on 26th March 2021

The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service.

On 7 January 2021 we announced the first part of our response to the Law Commission’s reports.

Under the current system, too many leaseholders find the process for extending their lease or buying their freehold too complex, lacking transparency and prohibitively expensive. We will reform the process of enfranchisement valuation; abolishing marriage value, capping the treatment of ground rents at 0.1% of the freehold value, and prescribing rates for the calculations at market value. We will also introduce an online calculator, further simplifying the process for leaseholders and ensuring standardisation and fairness for all those looking to enfranchise. These changes to the enfranchisement valuation process will result in substantial savings for some leaseholders, particularly those with less than 80 years left on their lease.

Through our reforms, the length of a statutory lease extension will increase to 990 years, from 90 years (for flats) and 50 years (for houses). Leaseholders will be able to extend their lease with zero ground rent on payment of a premium. Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’


The Government will respond to the Law Commission’s remaining recommendations on enfranchisement, commonhold and right to manage in due course


We will translate these measures into law as soon as possible, starting with legislation to set ground rents on newly created leases to zero in the upcoming session. This will be the first part of major two-part legislation to implement leasehold and commonhold reforms in this Parliament.

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