The Law Commission of England and Wales has recently published a report setting out options to reduce the cost that leaseholders have to pay to buy the freehold or extend the lease of their homes. The findings of the report have been published with the aim of making the process easier and more affordable for millions of leaseholders across England and Wales.
Commenting on the report, partner Mark Steggles says: “The Law Commission’s report sets out a path for making leasehold enfranchisement simpler, more transparent and cheaper for leaseholders. The report sets out three alternative options for a new regime for calculating the premiums payable to extend a lease or purchase a freehold, and a further seven sub-options in terms of items to consider when calculating the premiums for each regime.
“The potential abolition of marriage value (which is the increase in value that occurs where a tenant acquires the freehold) is the proposed reform most likely to concern landlords as it would decrease the value of the premiums payable by the tenants. However, this proposed reform, together with the proposed introduction of prescribed rates for calculating premiums and a suggested route for capping the impact of ground rent escalators that are causing such controversy at the moment, are likely to be warmly received by leaseholders.”