UK Government announce leasehold reforms
- 8th January 2021
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The UK Government has announced that leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent, under new measures aimed towards making the system fairer for homeowners.
Under current rules, leaseholders of houses can only extend their lease once for 50 years with a ground rent. This compares to leaseholders of flats who can extend as often as they wish at a zero ‘peppercorn’ ground rent for 90 years.
The latest changes will mean that any leaseholder who chooses to extend their lease on their home will no longer pay any ground rent to the freeholder. For some leaseholders, these changes could save them tens of thousands of pounds.
A cap will also be introduced on ground rent payable when a leaseholder chooses to either extend their lease or become the freeholder. An online calculator will be introduced to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.
In addition, leaseholders will also be able to voluntarily agree to a restriction on the future development of their property to avoid paying ‘development value’.
For more information, please read the full press release.
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