The changes follow an outcry several years ago when it emerged some flats and houses had been sold with clauses that meant ground rents would rise dramatically in later years. Around 4.5m households in England and Wales own their homes on a leasehold basis and pay an annual ground rent to the freeholder of the property – often an investment firm – which, through the lease, grants the right of the homeowner to live there. Currently, leaseholders of houses can only extend their lease for 50 years once and pay a ground rent, while flat owners can do so multiple times with a peppercorn rent for 90 years. Under the reforms, which were recommended by the Law Commission, both will be able to extend to up to 990 years with a ground rent at zero, and all new retirement properties will be sold without a ground rent. It originally incorrectly said that the reforms would apply to England and Wales.

Source: The Guardian January 07, 2021 09:33 UTC