Today the government at last introduced in parliament the much anticipated legislation ‘to simplify and make cheaper’ the process of extending a lease or acquiring the freehold, the reforms having been on the cards since January 21 as reported on this blog.
The process though is likely to turn into something of a damp squib.
As much as the anticipated less contested proposals to
- Extend an existing lease by 990 years on both flats and houses,
- Remove the 2 year wait to qualify (as already applies on collective claims for the freehold on blocks flats); and
- Increasing the 25% ‘non residential’ limit in collective claims is likely to reach the statute book.
- Fix / prescribe capitalisation, deferment rates and possibly relativity and even a standardised on line calculator.
The more contentious proposals to :
- Cap all existing ground rents to a peppercorn (as opposed to the previous proposal to cap all rents to 0.1% of freehold value for the limited purposes only of calculating the enfranchisement price), and:
- Abolish marriage value (which will approximately half the premium payable on an existing lease of circa 40 to 50 years unexpired when converted to freehold / extended 100 year + lease) –
it will remain to be seen whether these seminal changes will reach the statute book.
Nevertheless government launched on 9th November a 36 point consultation paper on whether it should cap ground rents which runs to 21st December.
https://www.gov.uk/government/consultations/modern-leasehold-restricting-ground-rent-for-existing-leases/modern-leasehold-restricting-ground-rent-for-existing-leases
In respect of the abolition of marriage value reform – there is likely to be severe challenge from freeholders and onward reference to Strasbourg on Human Rights issues which the government will be keen to avoid let alone whether there will be enough time to get all the proposals through before the next General Election.
Whether the government will have the oomph to get these ground breaking proposals through we will have to wait to see – watch this space.