Ground rents to be banned on new leases from 30 June - news story

user1977

saajan_12 said:

The Leasehold Reform (Ground Rent) Act is the first of two bills the Government is working on, with this one primarily benefitting future leasehold homeowners. A second bill, which is intended to make it easier and cheaper for existing leaseholders to extend a lease, is still at the consultation stage with no implementation date yet to be set. 

Better first step would have been to repeal the AST treatment and repossession rights for leases over £250/£1000 annual rent for everyone. 

Or take some proper steps towards repealing leasehold as being a bonkers system of tenure for residential properties.

eddddy

spilling said:

What about those of us in new builds apts with existing ground rent terms still in place? How will we sell? 

Presumably, you just price the property accordingly.

For example,

Two identical flats...

• Flat A has a ground rent of £0 - asking price is £250k
• Flat B has a ground rent of £200pa - so asking price is £244k

(And a lease extension for Flat B to bring ground rent to £0 would cost £6k. So very much equivalent.)


And if a developer is forced to change their leases from £200pa ground rent to £0pa ground rent from July - I guess they'd expect to increase their asking prices by £6k.


(So in many cases, everything balances out and it's not really a big deal. But it will stop developers from setting outrageous escalating ground rents.)