Reform is on its way to tackle escalating Ground Rent and the issues cause by Leasehold Houses
Following the consultation on unfair leasehold practices, the Government has responded with a summary and analysis. The Communities Secretary announced new measures which will be put in place on a rolling basis this year to cut down on “unfair and abusive practices within the leasehold system.”
The reforms proposed include a ban on leasehold status for almost all new build houses and impose a requirement for ground rent to be held at peppercorn for lease terms over 21 years.
This seems to be just the beginning of the reforms. The Government will be imposing wider reforms for leaseholders relating to residential management and enfranchisement. Leasehold owners will be able to challenge escalating ground rents, excessive service charges and buy a share of the freehold or extend their leases more easily.
Top tip: These reforms are very much on a ‘watch this space’ basis, but it is clear from the Government summary and analysis, that reform will be in favour of the Leaseholder as opposed to Developers and Landlords.
For Residential Property advice contact Gemma Wright Head of Residential Property.