If your home is leasehold then what you effectively have is an agreement to occupy the property for a certain number of years paying ground rent and complying with covenants in the lease.

 

Do you realise when the lease ends the freeholder landlord gets the property back and you become a statutory tenant?   

                                            

To delay this the current law gives people in flats and maisonettes a right to have an extension to the lease paying a peppercorn ground rent (zero) and for people in a house or a bungalow you can buy the land under your feet!  In other words acquire the freehold. This restores value as well as making the property easier to sell because purchasers cannot usually obtain a mortgage on leasehold properties if there are less than 75/80 years left on the lease and even long leases can prove problematic if they have too many rent reviews!

​

Government plans to change the law on leasehold property but if you have a house or bungalow it appears the valuation method is unlikely to alter so you probably ought not to delay buying the freehold as the majority of houses we deal with come under the original valuation method which is the most advantageous system to house owners. Your house needed to have the rateable value under £500 on 31 March 1990.

 

However, for folk in flats or maisonettes Government are talking about abolishing marriage value and this could well save you money - if they do it! (You pay marriage value when you have less than 80 years left on your lease)

 

Sadly your lease is a wasting asset and as its term reduces so does the value of your flat, bungalow, house or maisonette. The extent of this is not fully appreciated in the early years because history indicates the decrease in value is generally offset by property market increases. However, when you have less than about 75 to 80 years it is more difficult to obtain a mortgage - thus difficult to sell, except to cash buyers who pay less!

 

An extension to your lease or buying the freehold reverses this process and the full value of the property can be restored to you! This is the main reason people deal with their leases. Remember the longer you leave it the more expensive it becomes - unless Government does go ahead and abolish marriage value for those in flats and maisonettes. 

 

Leases can take several months from start to finish. If you are planning to move you might wish to act now so do not let your lease hold you up.

​

The “Leasehold and Freehold Reform Bill” is going through Parliament and may become law before the general election. 

 

Reformers have described its introduction as “momentous” with the bill set to make it easier for leaseholders to purchase their freehold and remove the current requirement to have owned the lease for 2 years before extending the lease; and make it easier for leasehold information to be obtained to make sales easier, including greater transparency over service charges. Standard lease terms are proposed to be increased to 990 years for houses and flats. The Bill will also “rebalance the legal costs regime and remove barriers for leaseholders to challenge their landlords’ unreasonable charges at Tribunal.”

​

Email: anthonywbrunt@gmail.com

​

​