Consultation on Fixing “Outdated, Unbalanced and Broken” Leasehold System
Leaseholders in mixed-use buildings have until 22 February to give their views on government plans to make it easier for them to buy the freehold of their properties.
The proposals, from the Department for Levelling Up, Housing and Communities, would affect leaseholders in buildings where there are non-residential units, such as shops and restaurants.
Currently some residential leaseholders in England and Wales can choose to buy their building’s freehold or take over its management. However, if more than 25% of the floorspace is taken up with shops and other units, leaseholders cannot make a collective bid to manage the block. The new proposals would increase this limit to 50%.
Other plans in the consultation would make it more affordable for leaseholders to buy a freehold. By requiring freeholders to retain the lease on some properties, the cost of a collective buyout would be reduced to a realistic level for leaseholders.
The government has also proposed the abolition of the ‘marriage value’ charged to people buying or extending a lease and an online calculator with set rates.
Leasehold Minister, Lord Greenhalgh said: “The current leasehold system is outdated, unbalanced and broken and we are determined to fix it. Our proposals aim to rebalance power and should see more leaseholders than ever before owning the full rights to their homes.”
The move follows an announcement by Housing Secretary Michael Gove of a new approach to building safety following the Grenfell Tower fire, with developers told that they, not leaseholders must fund the removal of dangerous cladding.
Existing reforms to the leasehold system, due to come into force this year, also mean no more ground rents for most new leases and extensions.
Read more about this story on the Property Reporter website.