Sweeping Whitehall changes which will protect the owners of new flats and leasehold homes from excessive ground rents have been welcomed by a Shropshire property solicitor.
Nichola Wilson, from mfg Solicitors, said that the Leasehold Reform (and Ground Rent) Act 2022 which is expected to become law later this year will ensure that leaseholders of new-build properties will no longer be financially trapped by disproportionate and escalating ground rent charges.
Whilst Mrs Wilson has welcomed the changes, she has also urged the government to go further to protect and support leaseholders.
Mrs Wilson, a senior associate within the law firm’s Residential Property department, said: “Over the past few years there has been wide pressure from industry bodies to change leasehold laws as charges made to those living in leasehold properties have become unbalanced and unfair.
“So this is great news for buyer of new leasehold homes or those able to afford to extend their existing leases using the statutory procedure. It effectively means that annual ground rent charges on those new-build properties or extended leases will be restricted to minimal peppercorn rent.
“It also means that landlords will not be able to charge simply what they wish and removes the risk of escalating ground rents such as those which unfairly double over time. These one-side ground rent provisions are affecting the saleability of existing leasehold properties as lenders tighten their criteria to avoid them.”
She said that the only downside of the new legislation, which is expected to be rubber-stamped by Parliament in the coming months, is that it fails to provide for the amendment to existing leases or those following the voluntary lease extension route.
She added: “It could be argued that with new leases benefiting from the changes, that in turn it will considerably affect the saleability of existing leasehold properties. It would be preferable for the new Act to be extended so that it benefits existing leaseholders, or even go further and force landlords to offer tenants the ability to alter their existing lease terms without penalty but we will have to wait to see what further legislation develops.”
Readers looking for further information can contact Nichola through email@example.com