Under the draft Commonhold and Leasehold Reform Bill, ground rents for existing leasehold properties would be capped at £250 per year, before eventually reducing to a “peppercorn” (effectively zero) after 40 years.
Announced by Prime Minister Sir Keir Starmer, the policy is intended to ease the financial burden on leaseholders, with some seeing savings of up to £4,000 across the course of their lease.
Aiming to give homeowners greater control over their buildings and how they are managed, the Government changes would also mean existing leaseholders would have the ability to convert to commonhold ownership if the majority of the applicable residents agree.
New apartments for sale would no longer have leasehold ownership. Instead, a shared commonhold ownership structure would take its place, with rules around management, repairs and leadership introduced.
The Government plans to design the refreshed commonhold system to work across all types of developments, as well as for mortgage lenders.
If you’re considering selling your property or would like to be among the first to hear when suitable properties become available to buy, please contact your local Mackenzie Smith office for tailored advice.
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