Niki Adkins is an associate and leasehold specialist at Frettens, in this article she revisits the January Leasehold Reforms Announcement, discusses their potential impact, and assesses how useful they could actually be.
What was the leasehold reform announcement?
Robert Jenrick, Housing Secretary, announced on January 6 that millions of leaseholders will be given a new right to extend their lease by 990 years.
If you would like to know the changes to leasehold property that the reforms made, please click here to read the original article.
What has the reaction been to the lease extension reforms?
The Government’s announcement regarding potential leasehold reforms in early January got everyone fairly excited and hopeful for some real progress with leasehold issues and concerns.
However, now that specialists in this field have had a chance to digest the announcement and consider the lack of clarity provided, it may not have been all it seemed.
One leading commentator said that the announcement was ‘all fur coat and no knickers’; which expression amused the Leasehold Property team no-end!
Leasehold reforms: what needs to be considered?
Essentially, there are two main points to consider; timing and content:
Timing of the proposed legislation
So, when will reform legislation take place?
Whilst we are confident the Government are going to enact some kind of reform legislation we are completely in the dark as to when that reform will take place.
Some legal commentators have suggested that, whilst simpler legislation (like the abolition of ground rents in new leases) may come sooner than later; real, tangible and – if you will, tasty – reform legislation may not be forthcoming until 2024 / 2025.
What do the reforms mean for leaseholders with short leases?
This presents its own problem for leaseholders who are presently stuck with a leasehold property with a short lease or a nasty ground rent. The majority of those leaseholders will likely want to sell or re-mortgage before 2024/2025, in which case, they can’t afford to wait that long.
As a result, those people may choose to ignore the announcement and proceed with their lease extension / enfranchisement plans as if the Government hadn’t said anything at all.
What about leaseholders with long leases?
For those with very long leases (over 100 years, for example), they may be happy to wait until 2024/2025 to see how they may benefit.
We would hope that progress is made sooner, but only time will tell.
Content of the proposed legislation
Are the reforms set in stone, or could they change before they become legislation?
Whilst the Government have outlined some of their proposals (e.g. making lease extensions cheaper/easier etc.), there is no guarantee that some of those proposals will not be watered down or even abandoned.
In order to enact legislation, one of the things that the Government has to do is debate the proposed legislation in the House of Commons.
There are arguments to be had on both sides of the leaseholder/freeholder camp, and we may therefore see variations of the January 2021 announcement actually enacted.
Everyone’s individual circumstances will be different, and so our advice must be tailored to anyone who contacts us about their concerns and queries.
Leasehold specialist solicitors in Bournemouth, Christchurch, Poole and the New Forest
Our specialist Lease Extension Team is one of the largest in the region and are happy to discuss any of the issues outlined in this article.
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