Michael Gove vows to help leaseholders ‘take back control’ of homes: New Bill will allow leases to be extended to 990 years, slash ground rents to ‘nominal’ amount and make it easier to buy freeholds

Michael Gove vowed to help leaseholders ‘take back control’ of properties today as he hailed new legislation.

The Levelling Up Secretary said the Leasehold and Freehold Reform Bill, being introduced to Parliament,  is a ‘landmark moment for millions’.

Other than in exceptional circumstances, new houses in England and Wales will be freehold from the outset, under the planned reforms.

The government says it will be far easier to extend leases to 990 years and purchase freeholds.  

However, campaigners have expressed concern that there will be no outright ban on leasehold sales of flats.

Michael Gove vowed to help leaseholders ‘take back control’ of properties today as he hailed new legislation

In interviews to mark the Bill’s first stage, Mr Gove said: ‘This bill is part of our long term plan for housing. It allows leaseholders to take back control of their properties. When people buy a leasehold flat, they believe and they should have the assurance of knowing they are buying a leasehold property for life.

‘But leaseholders, unfortunately, find that the nature of the flat that they bought is susceptible to the freeholder putting up service charges, increasing ground rent, and the lease will wind down over time in a way which means the value of their property diminishes, rather than it growing, as it should for any householder.’

Mr Gove told LBC: ‘This bill will mean anyone can transform their lease to a 990-year lease, so effectively taking back control of the property. It also means ground rents should be reduced to a peppercorn, just a tiny nominal amount, and there will be full transparency over service charges, so an end to exploitation. 

Rip-off charges will also be tackled, with a consultation on capping existing ground rents, to ensure leaseholders are protected from making payments that require no benefit or service in return and can cause issues when homeowners want to sell up.

Reforms to make it easier for leaseholders to purchase their freehold and tackle punitive service charges were outlined earlier this month in the King’s Speech.

The changes could make it easier for people to sell their properties and get mortgages.

The Leasehold and Freehold Reform Bill aims to improve homeownership for millions of leaseholders in England and Wales, by making it cheaper and easier for more leaseholders to extend their lease, buy their freehold and take over management of their building.

The standard lease extension term will be increased from 90 years to 990 years for both houses and flats, with ground rent reduced to £0.

This will ensure that leaseholders can enjoy secure ground rent-free ownership of their properties for years to come, without the hassle and expense of future lease extensions.

The legislation follows the Leasehold Reform (Ground Rents) Act 2022, which put an end to ground rents for new, qualifying long residential leasehold properties in England and Wales.

Asked why there would still be leasehold sales of some flats, Mr Gove stressed that it is ‘an incredibly complex area of law’. 

The Levelling Up Secretary said the Leasehold and Freehold Reform Bill, being introduced to Parliament, is a ‘landmark moment for millions’ (stock image)

‘We can’t at a stroke get rid of it, we are taking a huge step forward by ensuring that people, effectively, by having a 990-year lease, will be able to own their flat in effect,’ he said. 

‘We’re also making it much easier for people to secure control of their property, to enfranchise themselves. 

‘The process in the past has sometimes been held up by the process of marriage value, the freeholder trying to extract even more cash from the leaseholder. Well, that will go. It means full ownership. 

‘Yes, leasehold will still exist as a form of tenure, but effectively people will have control of their property at last.’ 

Source: Read Full Article