Leasehold Be Abolished
Currently, leasehold ownership is a popular way to buy homes as it allows people to own their home for a set number of years. It also allows people to contribute towards the upkeep of their building and pay common fees.
However, in recent years there has been increasing pressure on leasehold to be abolished due to its problems and unfairness. There are a variety of issues that arise when leasing properties such as high ground rents, decreased lease terms and escalating service charges among others.
These issues have led to a large number of homeowners struggling financially and often unable to sell their property. The government has pledged to change the leasehold system and to make it fairer, but this will take time to filter through.
Should Leasehold Be Abolished?
In the meantime, there is a range of changes that will make it easier and cheaper for leaseholders to extend their leases or purchase freeholds. These changes are likely to be a welcome step forward for many people, but there are some things that should be considered before any decision is made.
The new law on ground rent has come into force and will see all future leases have no ground rent. This includes new homes and if you have a lease extension. It will also mean that if you are going to buy a freehold, the cost of your ground rent will not be factored in when you take out a mortgage.
It’s only a temporary measure though and the government plans to bring in further reforms that could help more leasehold owners. The current plans for these include extending a lease by 990 years (currently you can only extend it by 90) and making it easier to buy a freehold.
If you want to extend your lease, you need to get a solicitor involved who will help you with the process and advise you on what your rights are. The process can be complicated, but it is worth getting help as this will save you a lot of money in the long run.
Another important factor to consider is marriage value, which can add a significant amount to the overall cost of extending your lease. This is the idea that you should pay half of the expected increase in the value of your property in the time you are living there to ensure the owner has enough money to cover any losses incurred during the term of the lease.
This is a very complex concept and it can be hard to calculate, so if you are thinking about extending your lease or buying a freehold, it is best to seek legal advice.
Buying a freehold can be a great option if you’re planning on renovating or extending your property and you’re able to do so without being restricted. In addition, it can also be a good deal as it means the freeholder will be paying you for the use of your property and they’ll be able to get a higher price for their investment.