UK Leasehold reform
The UK Leasehold mess: plans for change
The Secretary of State for Levelling Up, Housing and Communities, Michael Gove has this week (31 Jan 2023) committed to redesigning the “outdated, feudal” leasehold system of ownership we have here in the UK, which has been dubbed as the “UK’s Leasehold mess.” After long calls for change, it would appear plans for leasehold reform are now finally being made.
Tenure of property
The leasehold and freehold status of a property is often referred to as the tenure of a property. A leasehold title is a method of owning a property (usually a flat) for a fixed term but not the land on which it stands. Possession of the property will be subject to the payment of an annual ground rent. When the lease expires, ownership of the property reverts back to the Freeholder. A freehold title means that the owner has outright ownership of the property and the land on which it stands. A freehold estate in land (as opposed to a leasehold) is where the owner of the land has no time limits to his period of ownership.
A Lease of a property can state that ground rent and/or service charge is payable by the leaseholder. Certain levels of these payments can be off-putting for prospective purchasers and lenders alike. A leaseholder can have little or no say in the level of these charges. A Lease can also provide for a leaseholder to contribute towards the repairs needed to a building even if these are directly as a result of the original build. Gove’s pledge includes reducing ground rents to a peppercorn (which effectively sets the rate to nil) and to also ensure developers are committed to fixing unsafe tower blocks, or risk being banned from building new properties.
Leasehold property reform
These reforms should allow leaseholders to feel secure in their ownership without facing the very real prospect of losing their home because they can no longer afford the costs forced upon them. Leaseholders can also hopefully be free to sell their properties without the fear of hitting problems during the conveyancing phase.
David Gray specialist property team
Our Property Team at David Gray Solicitors are well versed in dealing with Leasehold properties. We will be keeping a close eye on the proposed reforms to allow us to ensure full transparent advice can be given to anyone looking to sell or buy a Leasehold property. If you have any questions or would like a free quote for residential conveyancing please contact us on 0191 243 8167 or email firstname.lastname@example.org.