Long Leasehold Extensions
In April 2017, the Department for Communities and Local Government estimated between 2015-2016 there were 4.2 million leasehold dwellings in England which equates to 18% of English housing stock. There were an estimated 1.4 million leasehold houses and 2.9 million leasehold flats.
A number of lenders will not grant a mortgage for a property with 70 years or less. This will leave a seller having to consider getting an extension assigning the benefit of an extension to a potential buyer. Under present regulations, in order to qualify for a statutory lease extension, an owner will have to meet certain criteria and have owned their property for a minimum of two years. Otherwise they may face the prospect of having to market the property to cash buyers only, limiting the number of buyers and potentially impacting on the ultimate sale price.
Unfair ground rents and onerous lease covenants are a topical issue and the government announced intentions to reform legislation addressed in 4.36-4.38 of the Housing White Paper February 2017 . The Law commission has opened consultation on Leasehold enfranchisement: A summary of proposed solutions for leaseholders of houses, published July 2018 with the full consultation paper expected Autumn 2018.
Key Acts to Note are:-
Leasehold Reform Act 1967
Leasehold Reform, Housing and Urban Development Act 1993
Commonhold and Leasehold Reform Act 2002
If you need advice on the premium that ought to be sought or payable either as a landlord or tenant, please contact Charles Morgan at our Ringwood office and for advice on block Enfranchisement, our consultant Simon Dancer on 01425 480 243.