
The government has announced that it will switch on a key part of the Leasehold and Freehold Reform Act next week.
Housing minister Matthew Pennycook yesterday signed regulations to remove the two-year ownership rule for leaseholders of flats and houses to extend their lease or buy their freehold.
The change will offer leaseholders the flexibility to make a claim immediately upon buying a leasehold property and reduce their costs as a result.
Reflecting on the development, the National Leasehold Campaign (NLC), said: “Whilst we welcome the action there is still a long way to go to deliver the promises Leaseholders desperately need and deserve. Without the valuation section of the Leasehold and Freehold Reform Act (LAFRA) 2024 being switched on, many leaseholders remain in a state of ‘Leasehold limbo’. They still won’t be able to afford the overinflated premiums and legal fees to buy their freehold or extend their lease.
“We urge the government to expedite the valuation part of the Act so that leaseholders can enfranchise or extend their lease quicker, easier and cheaper. This is what millions of leaseholders and the 30,000 members in the NLC are waiting for.
“Time is running out as in the meantime Leaseholders remain at the mercy of freeholder investors who continue to fleece tenants through extortionate charges trapping them in a system they cannot afford to get out of.”
So what does this actually mean to agents and their customers?
For leases with around 82 years remaining it may no longer be necessary for the seller/leaseholder to serve a Section 42 notice on their landlord to start the statutory lease extension process for the benefit of the buyer. That’s unless the lease it very close to dropping below 80yrs and the homemovers cannot afford to wait until the sale completes.
Is that it?
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This is nowhere near what is required and is just a Fig leaf for the government to hide behind.
Quite possibly the most timid move possible now being paraded as a ‘Major Announcement’. The public aren’t idiots so why not start not treating them as such. Either you are prepared to end this long running scandal of leaseholders being fleeced or not Mr Pennycook. Which is it?.
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Main issue with this…?
Only the registered owner can claim a statutory lease extension.
With the delays currently ongoing for registrations at the Land Registry, it could be over a year before a buyer can PROVE that they have the right to claim a lease extension.
If there are still 82+ years unexpired on the lease then it might be safe to buy now extend later, but otherwise it’s probably a good idea to just get the current owner to start the process before exchange of contracts.
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