The Law Commission has proposed a raft of new proposals which could make it easier for leaseholders to buy their freeholds. These will be welcomed by homeowners who have been told they must pay exorbitant amounts of money to buy their freehold.
There are an estimated 4.2m leasehold residential properties (one-third houses and two-third flats) in England, and around half of these are on leases with less than 80 years remaining. Ground rents average £370 per year.
One of the proposals that the Commission has put forward is to introduce a simple formula that would mean that eligible leaseholders would pay just ten times their current ground rent, or 10% of the value of the property, to convert their property from leasehold to freehold. It also recommends replacing the current right to purchase a one-off 50-year lease extension with the right to purchase an unlimited longer lease extension without a ground rent.
It also proposes removing the current requirement that leaseholders must own the lease on their property for a minimum of two years before they can buy their freehold.
The final recommendations will be published next year.