Government plans to reform the leasehold system by reducing costs of extending residential property leases have been cautiously welcomed by Principle Estate Management.
The leading property management company was commenting after Housing Secretary Robert Jenrick announced that new laws would help those on shorter leases who often face bills of many thousands of pounds.
The proposed legislation will include allowing houses and flats to extend leases by 990 years at zero ground rent, a ground rent ban extended to retirement housing, marriage value abolished with calculation rates set for enfranchisement, and a new Commonhold Council.
Brett Williams, the managing director of Principle, said that he while welcomed “more clarity” on what is a complex subject, the details of the planned legislation would need careful scrutiny.
He said: “Today’s announcement is aimed at making the purchasing process of the freehold of a property or extending a lease easier, simpler and cheaper for leaseholders.
“The government seems to be fulfilling its promise to help leaseholders by demystifying the process, and we welcome that aspiration.
“However, as always, the devil will still be in the detail, and expert consideration of the proposed laws will be needed to make sure they are fit for purpose.”
The planned government legislation follows reports published last year by the Law Commission on leasehold enfranchisement, commonhold, and the Right to Manage.
The detailed proposals could affect up to four million homes, and among those set to benefit are former council tenants, who bought their homes in the 1980s.
Mr Williams went on: “The launch of the new Commonhold Council is to be welcomed. With ground rents disappearing on new builds, future developments will be resident-run. Currently they could still be granted on a leasehold basis.
“The Government is keen to implement Commonhold, but that is not as straightforward as it sounds. A Council with input from all stakeholders will be enable a thorough review of all options.”
Mr Williams, a Chartered Surveyor and past-chairman of the Association of Residential Managing Agents who has nearly 30 years of experience in the sector, launched Principle in 2018.
The business has since grown from what was virtually a one-man band into what is now 28 staff looking after a portfolio over 6,500 units in around 250 developments across the UK.