Imagine buying your new home, it’s leasehold and you’ve been told how much the ground rent will cost you each year. Then, your lease is sold to another company who increase the ground rent significantly each year, to the point where selling your home becomes extremely difficult. Sadly, this is the situation many homebuyers have found themselves in. But things are changing thanks to a recent government announcement.
Thankfully, none of our clients have been in this situation, but it is important that as landlords and homeowners you understand what can happen and what is changing. A few weeks ago, the government announced a wide range of plans for leasehold reform. This included proposals to scrap the marriage value part of the fee that leaseholders must pay to the freeholder to extend their lease.
Currently, if you wish to extend the lease of a house, you can only do so once, for 50 years, and with a ground rent. Yet if you own an apartment, you can extend the lease as often as you want for a zero ‘peppercorn’ ground rent?for 90 years.?The new plans state that, whether you own a house or an apartment, you will be given the right to extend your lease for a maximum term of 990 years at zero ground rent, helping millions of homeowners and potentially saving you thousands of pounds.
The government plans also indicate that a cap will be introduced on ground rent to be paid when, as a leaseholder, you choose to either become the freeholder or extend your lease. There are also measures in place to protect the elderly, restricting ground rents to zero for new leases to retirement leasehold properties. All of this will no doubt give many families peace of mind.
We know that the topic of leases can be confusing when you’re looking to buy an apartment. Our team thoroughly understand the complexities of what is on offer in the Bath market, which means you will have all the information to make a clear and informed decision.
For more information on leases, ground rents and the Bath property market, contact our team on 01225 471144.