Government consultation for more leaseholders to own their own buildings.

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    Government consultation for more leaseholders to own their own buildings.

    Leaseholders could find it easier and cheaper to buy the freehold of their building under radical government proposals to create a fairer housing system..

    As part of a consultation opening today (11 January 2022), Homeowners and the housing industry are being invited to give their views on proposals from the Department for Levelling Up, Housing and Communities to allow more leaseholders in mixed-use buildings to take control and ownership of their building

    Leasehold Minister, Lord Stephen Greenhalgh said:

    - The current leasehold system is outdated, unbalanced and broken and we are determined to fix it.
    The consultation, running for 6 weeks until 22 February 2022, seeks views on proposals to give more leaseholders the ability to manage or own their properties - in buildings where there is a mixture of homes and other non-residential facilities, such as shops and restaurants.

    Sounds a recipe for disaster. And he has no idea what he is talking about either.

    Leaseholders don't control anything - they might have a share in something which might control something -- but they might in fact have far less control than before. Depends who those other leaseholders are.


      Exactly, yet more dad's army management companies, now doing zero maintenance to shops offices and factories.
      What could possibly go wrong ?


        Its a "consultation" by the Minister. . Members of the public and leaseholders can contribute their bad experiences on what is wrong .


          Ahhh. yes.... the famous British "Consultation".


            Done. It's proposing a 50% limit of commercial for enfranchisement and RTM claims (as opposed to 25% at present) .
            Imagine all those 60's shopping centres with flats above being managed by old uncle Bert and his mate from the pub.
            Another Grenfell or worse in the making.....


              At present if the commercial floor area exceeds 25%, the leaseholders of residential flats on first and second floor are blocked from taking control over their service charge account and enfranchising their building .

              The Government is proposing the raise the limit to 50% which allows more mixed use buildings , to come under control by the leaseholders appointed management company.


                The latest news on leasehold reform at 14 March 2022 , posted in Commonslibrary( Parliament ) :

                On 11 January 2021, Robert Jenrick, then-Secretary of State, said leasehold reform would be tackled through two pieces of legislation.

                The Leasehold Reform (Ground Rent) Act 2022 obtained Royal Assent on 8 February 2022. This Act fulfils the commitment to “set future ground rents to zero.” The provisions, when in force, will apply only to new lease agreements (ie not retrospectively). New leases of retirement properties are in scope, but not before 1 April 2023.

                Future legislation will:
                • Reform the process of enfranchisement valuation used to calculate the cost of extending a lease or buying the freehold.
                • Abolish marriage value.
                • Cap the treatment of ground rents at 0.1% of the freehold value and prescribe rates for the calculations at market value. An online calculator will simplify and standardise the process of enfranchisement.
                • Keep existing discounts for improvements made by leaseholders and security of tenure.
                • Introduce a separate valuation method for low-value properties.
                • Give leaseholders of flats and houses the same right to extend their lease agreements “as often as they wish, at zero ground rent, for a term of 990 years”.
                • Allow for redevelopment breaks during the last 12 months of the original lease, or the last five years of each period of 90 years of the extension to continue, “subject to existing safeguards and compensation”.
                • Enable leaseholders, where they already have a long lease, to buy out the ground rent without having to extend the lease term.

                Why is Govt unable to start "zero ( peppercorn ) ground rent" for new build property from 1 April 2022 ( in 9 days time ) ?

                If marriage value can be abolished, why not include "proceedings for ground rent arrears exceeding £350" ? .


                  Originally posted by Gordon999 View Post
                  [*]Cap the treatment of ground rents at 0.1% of the freehold value and prescribe rates for the calculations at market value.
                  Does anyone have any idea of what "the treatment of ground rents" means please?


                    No idea. Treatment of ground rent comes under "future legislation".

                    But you can ask your local MP to put your question to Housing Minister in Parliament.


                      Dont hold your breath folks, The only reason there is such a thing as "marriage value" is that they yield factors in the calculation are far too high. Even if marrriage value is abolished, I believe it wont be the give away that some leaseholders hope for. If it is too favourable to leaseholders, there is a higher chance of the legislation being in breach of Article 1 of the Human Rights Act which enshrines in law the right of owners to enjoy their possessions. Marriage value as I say only exists because the other elements of the calculation understate the benefit of the acquisition of the lease extension for the leaseholder. So it will be more likely to be a case of the yields coming down from 5 6 and 7 percent to the sort of yields savers enjoy. Givernment can easily put a statutory cap on costs, which should encourage settlement but it would be a big mistake to think that its going to be worth waiting for, particularly if your unexpired term is just over 80 years, or conversely really short, because the fall in the short leasehold value is most acute when the lease is getting critically short. There is a lot of work to do to get the leasehold reform on the statute book, particularly as the politicians think Commonhold is a viable form of tenure. Anyone with real experience of the realities of long leasehold will know that apathy is a problem, and the last thing you want to be doing is litigating against other people on your own estate. If freeholders were abolished, it would not be long before they were reinvented!


                        The Government has announced it intends to abolish "marriage value" in lease extension :

                        Future legislation will ( see post #8) :
                        • Reform the process of enfranchisement valuation used to calculate the cost of extending a lease or buying the freehold.
                        • Abolish marriage value.
                        • Cap the treatment of ground rents at 0.1% of the freehold value and prescribe rates for the calculations at market value. An online calculator will simplify and standardise the process of enfranchisement.


                          Posted on website for "leaseholdreformnews", the Leasehold Reform (Ground Rent ) Act 2022 will commence on 30 Jun 2022.

                          This means all new residential leases starting from 1st July 2022, will state one peppercorn ground rent ( No annual ground rent to pay). Does this mean new leases will still be sold under 99 year or 125 years lease term ?


                            More rubbish, like the EPC nonsense. They should put their efforts into things that will make a real difference.


                              Its not rubbish to discuss and understand the changes in the leasehold reforms; and what change is coming to the existing rules for solicitors drafting new leases commencing on or after 30 Jun 2022.

                              The EPC nonsense is a local council requirement for raising energy efficiency in rental property. If you are owner of an old rental property which does not comply to EPC-E, you will have liability problems .


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