Leasehold Property Owners MUST Watch This!
Housing Market Update Leasehold Reform Act Passes
into law.
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Wednesday at 7.00PM. Places are limited, so register
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The UK leasehold system has long been a contentious issue,
and many argue it’s one of the biggest scams in history. The current system,
which dates back to feudal times, sees homeowners purchasing property but not
the land it stands on. Instead, they lease the land from a freeholder, often
for 99 years or more.
Watch on my Money Tips YouTube channel video - https://youtu.be/i9WAY0qrt0U
In theory, this feudal relic has reformed by the Leasehold
Reform (Ground Rent) Act which was passed into law by Parliament and granted
the ‘Royal Assent’ on 24 May 2024, just before it was closed for the
forthcoming election. But many feel it has been watered down from its original
aims.
Read the Act in full - https://bills.parliament.uk/bills/3523/publications
Leasehold Reform Act Summary
·
An Act to prohibit the grant or assignment of
certain new long residential leases of houses,
·
To amend the rights of tenants under long
residential leases to acquire the freeholds of their houses,
·
To extend the leases of their houses or flats,
and
·
To collectively enfranchise or manage the
buildings containing their flats,
·
To give such tenants the right to reduce the
rent payable under their leases to a peppercorn,
·
To regulate the relationship between residential
landlords and tenants,
·
To regulate residential estate management,
·
To regulate rent charges and to amend the
Building Safety Act 2022 in connection with the remediation of building defects
and the insolvency of persons who have repairing obligations relating to
certain kinds of buildings.
The new law will be good news for most leaseholders,
especially those holding short leases.
Summary of benefits to leaseholders known as tenants.
·
New rights for leasehold tenants to acquire their freehold; under
the new legislation it will be cheaper
and easier for tenants to buy a
share of their freehold
·
Tenants
will no longer have to pay
their freeholder’s costs when making an enfranchisement claim.
·
Selling
new houses on a leasehold basis will be banned in England and Wales (save for
in very specific circumstances)
·
All new
houses sold will be on a freehold basis.
·
Standard
lease extension terms will now increase to 990 years for both houses and flats
(was previously 50 years for
houses and 90 years for flats).
·
The new
legislation will mean that ‘marriage value’ will not be split with a
freeholder. Marriage value is the hypothetical profit resulting from the
extension of a short lease (being one with less than 80 years remaining).
However, deferment and capitalisation rates still need to be set (and will be
prescribed when the Act is brought into force). The deferment rate is the
figure used to calculate how much compensation a tenant pays to their landlord
when extending the term of their lease. It is a crucial element in calculating
the premium an owner must pay to extend their lease (or to secure a share of
the freehold) and ultimately any change in the rate could be more costly for
those with more than 80 years left to run on their leases where they are seeking
to extend.
·
Tenants
will no longer have to own a
property for 2 years (as per the
Leasehold Reform Act 1967) before extension of a lease can be applied
for, meaning extensions can be
obtained from completion of a purchase.
·
Enfranchisement
for semicommercial properties will
change from 25% to 50%. It has not possible to enfranchise a building which had over 25% of commercial parts; the new Act will qualify more
buildings permitting leaseholders a greater opportunity to purchase the freehold or access the Right to Manage.
Service charges and insurance
Landlords will now
have to demand Service charges in a standard form and provide more clarity.
Tenants will have the right to challenge unreasonable charges.
A new ban on
commissions made on insurance by freeholders and/or managing agents and more transparency on fees for placing insurance.
Management of buildings
The legislation will require those freeholders who manage any buildings to
belong to a redress scheme enabling leaseholders to challenge charges.
Section 24
Landlord Tax Hike
Interview with Chartered Accountant and property tax
specialist who reveals options and solutions to move your properties from your
own name into a limited company or LLP whilst mitigating the potential HMRC
pitfalls.
Email charles@charleskelly.net
for a free consultation on how to deal with Section 24.
Watch video now: https://youtu.be/aMuGs_ek17s
3 Steps To Success Financial Freedom And Money
Management!
I want to take you to the next level, help you get control
of your money, learn how to invest and become financially free.
Join me online on my free live money management training
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Places are limited, so register
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