 |
answer text |
<p>The Government is committed to promoting fairness and transparency for homeowners
and ensuring that consumers are protected from abuse and poor service. The Government
is taking forward a comprehensive programme of reform to end unfair practices in the
leasehold market. This is a long-term reform programme; it is complex with many interdependencies
and will take time to get the detail right. Once it is enacted the effect will be
felt for generations and so we are determined this work considers all the implications
with care.</p><p>Under the current system, too many leaseholders find the process
for extending their lease or buying their freehold (a process known as enfranchisement)
too complex, lacking transparency and prohibitively expensive.</p><p>The Government
will reform the process of valuation that leaseholders must follow to calculate the
cost of extending their lease or buying their freehold. The Government will 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. The Government will also introduce
an online calculator, further simplifying the process for leaseholders and ensuring
standardisation and fairness for all those looking to enfranchise. These changes to
the enfranchisement valuation process will result in substantial savings for some
leaseholders, particularly those with less than 80 years left on their lease. Our
reforms to enfranchisement valuation also ensure that sufficient compensation is paid
to landlords to reflect their legitimate property interests.</p><p>Through these reforms,
the length of a statutory lease extension will increase to 990 years, from 90 years
(for flats) and 50 years (for houses). Leaseholders will be able to extend their lease
with zero ground rent on payment of a premium. Leaseholders will also be able to voluntarily
agree to a restriction on future development of their property to avoid paying 'development
value'.</p><p>The Government has also established a new Commonhold Council as a partnership
of industry, leaseholders and Government that will prepare homeowners and the market
for the widespread take-up of commonhold. This will take time and close working with
consumers and industry, and the Commonhold Council will be the critical first step
of this.</p><p>We will respond to the Law Commission's remaining recommendations on
enfranchisement as well as commonhold in due course.</p><p>The measures will be translated
into law as soon as possible, starting with the Leasehold Reform (Ground Rents) Bill,
which was introduced into Parliament on 12 May. This Bill will make homeownership
fairer and more transparent for thousands of future leaseholders, by legislating to
prevent landlords under new residential long leases from requiring a leaseholder to
pay a financial ground rent. This will be the first part of major two-part legislation
to implement leasehold and commonhold reforms in this Parliament.</p><p> </p>
|
|
