Government consultation for more leaseholders to own their own buildings.

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  • Gordon999
    replied
    Commonhold property system operates throughout Europe for past 100 years and in Australia where it is known as Strata title ( since starting in Melbourne , from around 1961) .

    Leasehold property has continued in E & W because every successive Government operates under the "rule of law" which protects the existing lease agreements . New leases for residential property can start from 99 years or from 125 years term and can be extended by statutory 90 years lease extension.

    The leasehold property system is not the choice of the silent majority ( public buyers ). Parliament has passed the LR(GR) Act 2022 ( one peppercorn ground rent ) which comes into enforcement on 30th Jun 2022.

    You are right "the law does not change quickly."

    Leave a comment:


  • flyingfreehold
    replied
    There is no certainty it will be cheaper to wait. It might be, but not by so very much. At present the calculations are based on interest rates that are higher than prevaling interest rates. This may fall, so that on a true valuation there isnt really any marrage value. It doesnt look as if the law will change very quickly, could be five years away, because they havent figured out how Commonhold will work in detail and without that its just tinkering.

    Leave a comment:


  • Gordon999
    replied
    This was posted on the moneysavingexpert.com website on 11 May 2022 :

    The proposals – what we know so far


    Here is how the process of extending a lease will change, according to the proposals:
    • All leaseholders who can extend their lease will have the right to do so by 990 years. Currently, leaseholders of houses can only extend their lease once, by a 50-year period, while leaseholders of flats can extend leases as often as they wish for a 90-year period.
    • Many who extend their lease or buy their freehold will pay less BUT we do not yet know how much cheaper it'll be. A promise has been made that one of the charges involved in the cost of extending a lease or purchasing a freehold, known as 'marriage value', will be abolished. This is the amount of extra value a lease extension would add to your property, and it applies when a lease drops to less than 80 years in length (see full explanation here).

      While we can't say for certain how much cheaper extending a lease will become once the changes take effect, it is expected to be in the £1,000s for many leaseholders
    Sadly it is unclear when these proposals might become law


    While this is welcome news for homeowners, there is no definitive timetable for when these proposals around extending a lease will become law (we'll update this guide once we know more).

    Essentially, there are two separate leasehold bills. One of the bills will ban ground rents in new leases and prevent ground rents being added via informal lease extensions – this'll take effect from 30 June. A second, separate bill, will make the formal process of extending a lease cheaper and easier.

    Leave a comment:


  • Section20z
    replied
    Originally posted by Gordon999 View Post

    So does "new lease" include non-statutory lease extension back to 99 years ?
    One would imagine so if it was a new lease, though a Deed of Variation might dodge the law. Will find out next time I'm asked for one.

    Leave a comment:


  • Gordon999
    replied
    Originally posted by Section20z View Post

    They won't be affected as they've had nil ground rent since 1993.
    So does "new lease" include non-statutory lease extension back to 99 years ?

    Leave a comment:


  • Section20z
    replied
    Originally posted by Gordon999 View Post
    But it is not clear if "new lease" includes "statutory 90 years lease extension".
    They won't be affected as they've had nil ground rent since 1993.

    Leave a comment:


  • Gordon999
    replied
    The Leasehold Reform (Ground Rent) Act 2022 comes into force on 30 Jun2022 and all new leases over 21 years issued after this date will state "one peppercorn" ground rent. This rule does not apply to leases under 21 years .This news was posted by the website shown below.

    But it is not clear if "new lease" includes "statutory 90 years lease extension".

    https://gateleyplc.com/insight/in-de...me-into-force/

    Leave a comment:


  • Gordon999
    replied
    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 .

    Leave a comment:


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

    Leave a comment:


  • Gordon999
    replied
    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 ?

    Leave a comment:


  • Gordon999
    replied
    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.

    Leave a comment:


  • flyingfreehold
    replied
    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!

    Leave a comment:


  • Gordon999
    replied
    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.

    Leave a comment:


  • Sydaton
    replied
    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?

    Leave a comment:


  • Gordon999
    replied
    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" ? .

    Leave a comment:

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