The Legislation Fee has set out a spread of proposals which it mentioned will make it cheaper for Britain’s 4 million leaseholders to purchase their freehold or lengthen their lease. Nevertheless, the reforms have been instantly branded by campaigners as “nothing greater than tinkering”.
Amid widespread controversy over spiralling floor rents and extortionate calls for from freeholders, the federal government final 12 months requested the Legislation Fee to provide proposals to simplify the method and supply a greater deal for leaseholders.
Throughout the session interval, campaigners nearly unanimously sought a easy new method for extending or buying out a lease, arguing for a value set at 10 instances the bottom lease.
Nevertheless, the Legislation Fee rejected such a method, saying it could be a probable breach of the human rights of freeholders. It mentioned: “The legislation governing human rights is very related to valuation reform”, noting that the European Conference on Human Rights “gives for the peaceable enjoyment of property”.
The fee as a substitute set out three choices for reform – certainly one of which broadly maintains the established order, whereas the opposite two eradicate what is called “marriage worth” and “hope worth”.
It gave a labored instance of somebody with a £250,000 property with solely 76 years left on the lease and a present floor lease of £50 rising to £200 a 12 months. It mentioned below current calculations, the leaseholder must pay £16,453 to purchase out the lease. Beneath its proposals, the associated fee would fall to £10,615 if “hope” worth is reformed, and drop to £9,155 if there is no such thing as a “marriage worth”.
The property legislation commissioner, professor Nick Hopkins, mentioned: “We have been requested to supply choices for reform that save leaseholders cash when shopping for their freehold or extending their lease, whereas making certain that enough compensation is paid to landlords. That is what we’ve achieved. We’re prepared to assist the federal government in implementing whichever choices for reform they select.”
Welcoming the report, the housing secretary, Robert Jenrick, mentioned he’ll take into account the proposals and set out the federal government’s response. “We’ve got already dedicated to addressing the abuses of leasehold seen lately, by lowering floor rents to a peppercorn stage and limiting new leasehold to flats, save in probably the most distinctive circumstances. The Competitors and Markets Authority is inspecting the alleged mis-selling of leasehold properties and I will even await their findings with curiosity.”
Nevertheless, campaigners mentioned they have been deeply disillusioned by the Legislation Fee proposals. Sebastian O’Kelly of the Leasehold Information Partnership mentioned: “It is rather troublesome to be too captivated with choices to authorities which give the £2.5bn annual leasehold enfranchisement sector loads of scope to dilute any significant reform.
“A course of which started with the purpose of creating the enfranchisement course of extra open and cheaper now has heavy emphasis on the ‘human rights’ of property homeowners – even when nameless ground-rent speculators within the British Virgin Islands.”
