Summary
The UK government is proposing changes to the leasehold system in England and Wales. These changes include capping ground rents and ending the sale of new leasehold flats. Instead, new flats will use a commonhold system where flat owners collectively own the building and land.
Key Facts
- The UK government plans to cap ground rents for leasehold homes at £250 a year, reducing to nearly zero after 40 years.
- The sale of new leasehold flats will be banned, with new flats sold as commonhold, a system where owners collectively manage the property.
- The reforms affect around 3.8 million properties that currently pay significant ground rents.
- The changes follow the abolition of ground rents for most new residential leasehold properties in 2022.
- Under the commonhold system, flat owners have more control over their property costs compared to the leasehold system.
- Existing leasehold properties' transition to commonhold is still under discussion, with consultations ongoing until April 2024.
- Service charges for maintenance will be made more transparent, and landlords will be held accountable.
- The government will scrap the process of "forfeiture," which allows freeholders to seize leaseholder properties through court action.
