“Will reform of leasehold law affect me?”
25 October, 2018
By Jane Canham, Leasehold Specialist, Storrar Cowdry
The Law in relation to purchasing the freehold of your house or block of flats or extending the lease of your flat is going to change but how and when that will be nobody yet knows.
Solicitors, valuers and others working in the sector are putting their collective thinking caps on in order to respond to the Law Commission Consultation which came out at the end of September. We all have different views and different priorities and the Commission anticipates that it will take about a year to prepare its final report, that is quicker than usual and suggests the level of importance being placed on changes to the law in this area.
It is anticipated it will take at least three years before anything makes it onto the statute books. The government (whichever party is in power) will be keen to appeal to the millions of people who own leasehold properties in order to capture votes but there is no mistaking the fact that the government has a few other matters across the water to deal with first and those must surely take priority. The Consultation has already been extended into next year suggesting that the Commission has realised that it cannot rush through such important changes and perhaps also suggesting that it had underestimated the sheer level of response it thought it might receive.
I have been asked by a number of clients whether they ought to wait before purchasing the freehold of their house or extending their lease and my answer to that has been and remains no. We do not know which of the proposals will make it onto the statute books. It is unlikely that the Consultation in its current form will be accepted wholesale or at all, there is too much at stake for Freeholders and large investors in this Country.
Whatever happens the premium you will pay for your freehold or lease extension will increase as your term decreases and it is important not to let your lease term fall below 80 years as it becomes more expensive when marriage value needs to be paid. There is a suggestion that marriage value maybe scrapped under the new legislation but that is only one of many proposals and arguably too big a risk to wait for that to become law.
If you are interested in extending your lease, purchasing the freehold of your house or need any other advice in relation to enfranchisement generally please do not hesitate to contact me at Jane.Canham@storrarcowdry.co.uk.
If you are interested in reading more about the Consultation I will be writing another article about some of the proposals in more detail.