Following the flurry of news regarding ground rents on leasehold houses, the Department for Communities and Local Government is looking at possible measures to deal with rising ground rents in the residential housing market. These measures will only apply in England and include:
- limiting the sale of new leasehold houses
- limiting ground rents on new residential leases over 21 years
- exempting long leases from possession orders due to ground rent arrears.
This review is long overdue, and with many lenders now refusing to lend on any leasehold properties with escalating ground rents, this makes affected properties hard to sell.
However spare a thought too for landlords who, having entered into or acquired perfectly legal contracts, will bear the knock on effect on the value and marketability of their freehold interest when expecting a reasonable return on their investment.
Notwithstanding this, I would suggest the review should be more wide ranging than just ground rents. Many professional landlord management companies charge exorbitant sums during the conveyancing process for supplying basic documentation or granting simple consents. Even dealing with straightforward notices relating to changes of ownership and mortgages can sometimes cost hundreds of pounds. Tenants are at the mercy of these companies and it’s high time to regulate this market.
For those who wish to respond to the consultation you have until 19 September: click here
For more information, please contact our conveyancing team who can help you with the legal aspect of buying and selling your residential property, and will ensure any new legislation are met. Our property litigation team can help you with any current or potential property disputes, and they will be able to advise on the best course of action going forward.
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