Letting Property
Homeowners who have recently purchased a flat have received a significant boost following a landmark legal change that allows them to extend their leases without waiting two years. This reform, part of the Government’s broader overhaul of leasehold and freehold regulations, removes a major barrier for leaseholders seeking to secure the long-term value of their property.
Lease extensions are crucial as they not only increase a property’s market value but also make it easier to sell. Under the new law, leaseholders applying for an extension will automatically be granted a 990-year lease with a nominal, or “peppercorn,” ground rent, eliminating future ground rent obligations.
Leasehold properties lose value over time because of a diminishing term (the number of years left on the lease) and the need to pay ground rent (an annual payment that often doubles every 5-10 years). Extending a lease is an important right because it allows leaseholders to increase the number of years left on their lease and to remove their ground rent burden, protecting and increasing the value of their property.
