The government has announced changes to the Law in relation to leasehold properties.
Under the current law, a leaseholder has a right to claim an extension of 90 years and a reduction of the rent to a peppercorn, effectively zero rent. However this can be very expensive, especially if the term of the lease is already quite short.
Under the new proposals, there will be a right to extend a lease to a new standard 990 years with a ground rent at zero. The method of calculating the premium will be cheaper with some prohibitive costs currently included in the calculation being abolished.
An online calculator will be introduced to make it simpler for leaseholders to find out how much it will cost them to buy their freehold or extend their lease.
The government had already committed to restricting ground rents for new leases to zero but this did not include retirement properties. Under the new proposals, this will be extended to retirement properties, although implementation will be deferred for 12 months after Royal Assent.
Initial legislation to implement these proposals will be introduced in the upcoming session of Parliament.
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