Close menu

Call our friendly team today on: 01244 346226

Call us on: 01244 346226

Follow us on social

How the proposed reform of leasehold legislation could affect your leasehold property -

Reform of the leasehold system is long overdue. An overhaul is needed to make things fairer for leaseholders and to put an end to onerous ground rents.  In this article, we explain what the proposed reforms are and how they might affect those purchasing leasehold property in the future.

Freehold v Leasehold – what’s the difference?

There are two main types of residential property: freehold and leasehold. A freeholder owns both the building  and the land it sits on outright, a leaseholder owns the building / apartment  for the duration of their lease agreement with the freeholder. Ownership returns to the freeholder when the lease expires unless an extension is agreed.

The current negative impact of leasehold property

As it stands today, the biggest drawback with purchasing a leasehold property is the spiraling ground rents. Some developers have been accused of doubling ground rents every 10 years, causing property to become ‘unsaleable’ because of these high ground rent charges.

There are other charges which some deem unreasonable for repairs, lease extensions and minor alterations. When it comes to selling a leasehold property, there are also charges for transferring the lease to a new owner and answering questions posed by the buyer’s solicitor.

The Government are keen to make sweeping changes and the Law Commission are currently consulting on a number of proposals including a ban on the sale of leasehold houses and an end to ‘onerous ground rents’.

Leasehold Reform – what are the proposed changes?

The proposed reforms aim to promote transparency and fairness for existing leaseholders purchasing the freehold of their property.

The proposals include removing the requirement that a lessee must have owned their property for at least two years before they can extend their lease.

Ground rents in new leases of flats (and, where permitted, houses) granted after the legislation takes effect will be capped at £10 per annum.

These reforms are good news to all prospective leasehold buyers.  However, what still needs to be addressed is what is going to be done to assist existing leaseholders who are now questioning whether to pay out for a lease extension now or wait to see what new legislation will be introduced.  

The government has given no firm commitment as to when legislation is likely to be enacted to cover these proposals, comments within the paper indicate that the proposal may be taken forward in 2019, meaning that any legislation is unlikely to be enacted until mid-2020 at the very earliest.

At Matthew’s, we have extensive experience with leasehold property in respects of sales, lettings and property / block management.   We have generated excellent legal contacts that can also offer specialist advice on leasehold matters.

Whether it is sales, lettings and block management it is important to select an agent and  or solicitor who is experienced in leasehold, in order to get the right advice and reduce the risk of delays in the conveyancing process .    

Should you wish to discuss leasehold property with our team, please do not hesitate to contact us.


  • Arma logo
  • The Property Ombudsman logo
  • Naea Propertymark Protected Logo
  • Arla Propertymark Protected Logo

© Matthew's of Chester 2019