Updates on leasehold reforms on existing leasehold houses?

topoftherock

Hi all, have there been updates on leasehold reforms over the last month or two for existing leaseholds on houses? Thanks 

user1977

No, absolutely nothing has even started going through Parliament, so I wouldn't hold your breath for clarity about changes in the near future.

topoftherock

user1977 said:

No, absolutely nothing has even started going through Parliament, so I wouldn't hold your breath for clarity about changes in the near future.

Hi, thanks for your reply. Our freeholder (via their solicitor and valuer) want £32k for the freehold, however, we can only afford £15k. We made them  an  offer of £15k and it was refused.  So therefore, we’ll just have to wait and see.  We pay £1k per year ground rent, it’s a 50-year leasehold extension (which started in 2010) and it’s a terraced house. 

eddddy

If and when the proposed reforms become law, they will apply to existing leasehold properties - but possibly not in the way you hope.

For example, the proposals include

• Giving leaseholders the option to 'buy-out' their ground rent (at a cost) to reduce it to zero
• Making it simpler to buy the freehold, making the cost of the freehold easier to calculate, reducing the amount of fees to pay (and maybe the cost of the freehold will be less - or maybe not).

All existing leasholders will benefit from those reforms, if they become law.

There also reforms proposed relating to granting new leases - like ground rents must be zero, houses should be sold with freehold whenever possible.

But if, for example, you're hoping that your ground rent will be reduced to zero for free, or you will be given the freehold of your house for free - that's not part of any of the proposals, so it's very unlikely to happen.

topoftherock

eddddy said:

If and when the proposed reforms become law, they will apply to existing leasehold properties - but possibly not in the way you hope.

For example, the proposals include

• Giving leaseholders the option to 'buy-out' their ground rent (at a cost) to reduce it to zero
• Making it simpler to buy the freehold, making the cost of the freehold easier to calculate, reducing the amount of fees to pay (and maybe the cost of the freehold will be less - or maybe not).

All existing leasholders will benefit from those reforms, if they become law.

There also reforms proposed relating to granting new leases - like ground rents must be zero, houses should be sold with freehold whenever possible.

But if, for example, you're hoping that your ground rent will be reduced to zero for free, or you will be given the freehold of your house for free - that's not part of any of the proposals, so it's very unlikely to happen.

Hi, thanks for your comment. Yes, I’m definitely not expecting the freehold for free. We recently  Paid £480 just to get the £32k asking price. So with the new reforms e.g introducing the online calculator which has been discussed, I’ll be much happier and at least won’t have to pay to get an asking price. 

topoftherock

Realistically, when will these proposals come in? 2023? 

Grumpy_chap

topoftherock said:

 a 50-year leasehold extension 

Why are you considering a 50-year lease extension and not the statutory 90 years which then also cancels ground rent?
I am not an expert, so does the statutory option not apply in this case?

topoftherock

Grumpy_chap said:

topoftherock said:

 a 50-year leasehold extension 

Why are you considering a 50-year lease extension and not the statutory 90 years which then also cancels ground rent?
I am not an expert, so does the statutory option not apply in this case?

Hi, with our house, the only option (when the original 99-year lease ended in 2010) was to buy the freehold of course (which we couldn’t afford at the time) or have a 50-year lease extension. So, we opted for the latter, and therefore we are already 11 years into the 50-year extension period. 

eddddy

Grumpy_chap said:

topoftherock said:

 a 50-year leasehold extension 

Why are you considering a 50-year lease extension and not the statutory 90 years which then also cancels ground rent?
I am not an expert, so does the statutory option not apply in this case?

90 years added with ground rent reducing to zero relates to a flat - and you have to pay for it. The OP has a house.

For a house, the a statutory lease extension is free, it adds 50 years to the lease, and increases the ground rent to a 'Modern ground rent' - in the OP's case, this seems to be £1k per year.

See: https://www.lease-advice.org/faq/i-cant-afford-to-buy-the-freehold-of-my-house-can-i-extend-my-lease-instead/

topoftherock

eddddy said:

Grumpy_chap said:

topoftherock said:

 a 50-year leasehold extension 

Why are you considering a 50-year lease extension and not the statutory 90 years which then also cancels ground rent?
I am not an expert, so does the statutory option not apply in this case?

90 years added with ground rent reducing to zero relates to a flat - and you have to pay for it. The OP has a house.

For a house, the a statutory lease extension is free, it adds 50 years to the lease, and increases the ground rent to a 'Modern ground rent' - in the OP's case, this seems to be £1k per year.

See: https://www.lease-advice.org/faq/i-cant-afford-to-buy-the-freehold-of-my-house-can-i-extend-my-lease-instead/

That’s spot on. That’s why we went from paying £2 per year on the original 99-year lease (from 1911 to 2010), to a modern-day ground rent of £1k (2010 to 2060) for the 50-year extension.