The Law Commission recently recommended to the government various changes to the current law on freehold purchases and lease extensions in respect of leasehold flats and houses (known as leasehold enfranchisement) in order to reduce the price payable by tenants and make the enfranchisement process fairer and simpler.

The government took its first step towards implementing the Law Commission recommendations by announcing on 7 January 2021 that both house and flat leaseholders will, under new law, be able to extend their lease to a new standard 990 years with zero ground rent payable.

The government aims to make leasehold enfranchisement cheaper and simpler for the millions of leaseholders across the country, and ultimately to change our system of home ownership to allow homeowners to own their property on a freehold basis, giving them greater control over costs, owning and managing blocks and estates jointly with other homeowners.

What are the proposed measures to make leasehold enfranchisement cheaper and easier for leaseholders?

Below we set out the future measures likely to be taken to achieve these aims:

In addition, various other proposals were made by the Law Commission and we should hear more from the government on these at a later stage, including:

The government will also seek to promote commonhold as an alternative to leasehold and further legislation will follow to facilitate this, including the formation of a Commonhold Council which will comprise of a partnership of leasehold groups, industry and government.

The timetable for the changes to take effect as new law is unclear and there is still uncertainty as to the precise changes that will be made. It is expected that the legislation will be brought forward to the upcoming session of Parliament to set future ground rents to zero, and the other recommendations are expected to take effect in the months or years thereafter.

For further information, or advice on matters relating to leasehold enfranchisement, please contact our team at jennifer.sanders@parissmith.co.uk