Far-reaching leasehold reforms announced by Housing Secretary Robert Jenrick.

The Housing Secretary will abolish ground rents and push ahead with introduction of “commonhold” tenure.

The government announced today that it is pushing ahead with long-awaited reforms to the leasehold system which will make it impossible for freeholders and developers to impose ground rents on leasehold residents especially those with onerous terms.

Housing secretary Robert Jenrick said “the new system, brought in as part of the government’s response to the leasehold homes scandal –  in which buyers of new-build houses were asked to pay large ground rents which doubled every 10 years – will see leaseholders given the right to extend their leases at zero ground rent”.

Leasehold house owners can only extend their leases by a maximum of 50 years, and cannot alter the ground-rent terms in current practices.

The government will also abolish prohibitive costs such as “marriage value” and set standard calculation rates to ensure that costs are fair.

The government will also push ahead with the promotion of a new “commonhold” tenure of housing, used in many countries around the world, whereby leaseholders are jointly given full ownership of their building.

The housing ministry said it was establishing a “commonhold council” – a partnership of leasehold groups, industry and government – designed to prepare homeowners and the market for the introduction of commonhold.

In order to specifically protect the elderly, the government said it will reduce ground rents to zero on retirement properties.

The current reality of being a leaseholder was far too bureaucratic, burdensome and expensive. “We want to reinforce the security that home ownership brings by changing forever the way we own homes and end some of the worst practices faced by homeowners,” he said.

“These reforms provide fairness for 4.5 million leaseholders and chart a course to a new system altogether.”  

The proposals follow an in-depth review of the leasehold system by the Law Society, which recommended widespread reforms and the adoption of a “commonhold” system.

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