As announced in King’s Speech, the Government are pushing through changes that will affect leasehold property.
The Leasehold and Freehold Bill will ban leaseholds for new houses but not new flats in England and Wales and increase the standard lease extension period to 990 years.
Whether you proceed to extend your lease now or later will depend on a number of factors:
(1) If you have a lease of between 80-85 years left, then it may be feasible to wait until the new legislation comes into force but factor in that should you lease drop down to less than 80 years and the legislation is not forthcoming then you would be paying marriage value.
(2) If you have more than 82 years on your lease, then it is probably best to wait as the process and the cost may be cheaper;
(3) If you have less than 80 years, then it may just be wise to wait until the reforms come into force as they might make a lease extension cheaper.
It is important to note that if the changes do not come in when we expect them, then you could be paying more than if you just extend the lease now.
Your personal circumstances will dictate how you proceed as a short lease would be more difficult to sell or remortgage and for such reasons you may have no choice but to extend the lease now rather than wait until the legislation is in force.
The Government has stated that they intend to legislate before May 2024 and make the following changes:
(1) Reform the process of the valuation used to calculate the cost of extending a lease or buying the freehold;
(2) Abolish marriage value; and
(3) Provide an online calculator which will simplify and standardise the process of enfranchisement.
If you wish to discuss the terms of your lease and how you wish to move forward with a lease extension, please do not hesitate to contact Sarita Ghere, whose details may be found below.
For further information on the issues raised, please contact Sarita Ghere at firstname.lastname@example.org
Branch Austin McCormick LLP
32 St James’s Street