Leasehold Reform Bill Not Helping Already Affected Homeowners
Published / Last Updated on 10/02/2022
The Leasehold Reform Bill is still making its way through Parliament.
Part of the Bill addresses the issue when people by new leasehold properties they are currently at risk of huge increases in ground rents each year. The Bill will effectively mean that ground rents on new leasehold properties are set to a ‘peppercorn’ rent of say £1pa and protect leaseholders from significant increases.
The issue is that the Bill does not cover existing leases, so they remain unprotected.
Comment
The Bill is designed to protect new leaseholders and enable more people to buy in a fair and affordable way. It will not protect millions of people with existing ‘open ended’ leases. This is a tough one to crack given that millions of leases would need to be amended and lodged with the Land Registry. Surely, there is some simple way that this could be fixed? E.g. make it law than when a property sale of an existing leasehold property is made that an automatic peppercorn rent amendment is included. We are not lawyers but it would seem the logical thing to do.
No doubt, a second Bill will follow one day for this to be addressed for the millions of existing leaseholders (around 19% of the UK housing market).