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Sharp Practice Around Leaseholds Are Being Shown The Door By UK Government

View profile for Georgina Walters
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Home-ownership is now a simpler and less expensive prospect for many thousands of leaseholders across the country thanks to the scrapping of so-called ‘rip-off’ leasehold charges.

Under sweeping changes announced by the UK Housing  Secretary, Robert  Jenrick, millions of leaseholders will be given the right to extend their lease by a maximum term of 990 years at zero ground rent. Georgina Walters, Director and Head of Commercial Property for West Wales at JCP Solicitors, was pleased to be part of the Working Party with the Law Commission advising on these important changes, which will be welcomed by householders across the country.

In announcing the changes the Housing  Secretary said the intentions was to “reinforce the security that home ownership brings by changing forever the way we own homes and ending some of the worst practices faced by homeowners.” And to "provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”

The move sees one of the most contentious areas of property ownership being sorted out, to the potential benefit of existing householders and potential first-time buyers. Under current law freeholders can ramp up ground rent with little or no benefit to those faced with paying extra charges.

These changes will mean a leaseholder who chooses to extend their lease on their home will no longer pay ground rent to the freeholder, so people will be able to own their own home without extra red tape and expenses they have no control over. The change is expected to save some leaseholders thousands of pounds and to lift them out of the so-called ‘leasehold trap.’ Under current rules, leaseholders of houses can only extend their lease once for 50 years with ground rent payable, whereas, leaseholders of flats can extend as often as they wish at a zero ‘peppercorn’ ground rent, for 90 years. 

Under the new rules, both house and flat leaseholders will be able to extend their lease to a new standard 990 years with a ground rent set at zero, and a cap will be introduced on ground rent payable when a leaseholder chooses to extend their lease or to become the freeholder.  An online calculator will help leaseholders work out how much it will cost them to extend their lease or buy their freehold.

The changes will also apply to retirement leasehold properties, so buyer of these homes have the same rights as other homeowners and are protected from sharp practices. Other prohibitive costs like ‘marriage value’ will also be stripped away and calculation rates will be set in stone, to make things more transparent.


Our property teams are on hand to advise you with specialist legal advice. Contact Georgina on 01348 871018 or email georgina.walters@jcpsolicitors.co.uk.