Home Legal News Law Commission Publishes Leasehold Housing Reform Plans

Law Commission Publishes Leasehold Housing Reform Plans

The Law Commission has put forward plans to make the leasehold system fairer and cheaper for Britain’s 4 million leaseholders to buy their freehold or extend their lease.

The UK leasehold system has come under criticism in recent years for becoming unfair and costly, with some leaseholders facing extortionate demands from freeholders and high and escalating ground rents, making it harder to sell or re-mortgage their properties.

In response, the Government last year tasked the Law Commission with investigating the issues and making proposals to improve the situation for leaseholders while ensuring that “sufficient compensation is paid to landlords”.

Under its proposals, the legal watchdog has set out three options; two which eliminate so-called marriage value and hope value, and one ‘do nothing’ approach that maintains the status quo.

Marriage value is the increase in the total property value following a lease extension or collective enfranchisement.

Hope value refers to the market value of land based on the expectation of obtaining future planning permission for development.

Housing campaigners, however, have expressed concern that the commission’s proposals are “nothing more than tinkering” and do not go far enough, with too much emphasis on the “human rights” of property owners. There are also fears that the proposals could be diluted following inevitable pressure from freeholders, who are set to lose an estimated £16 billion if reform goes ahead.

The Law Commission’s proposals now sit with the Government to decide which of the three options for reform will be implemented.

Law Commission Publishes Leasehold Housing Reform Plans 2
Lawble is a leading legal resource aimed at supporting people and businesses alike by providing reliable information, legal resources and links to leading and reputable legal service providers.

Must Read

N244 Form (Where to Find & How to Complete!)

12 minute read Last updated: 13th August 2019 The N244 form is an application notice, used to apply for a court order in the...

Claiming Under the Sale of Goods Act (What You Should Do!)

5 minute read Last updated: 12 August 2019 Claiming under the Sale of Goods Act is the route a consumer should take if they...

Faulty Goods under Warranty (Your Consumer Rights!)

Where an item under warranty develops a fault, the path to remedying the situation may be as straightforward as claiming against your warranty but...

Nemo Dat Quod Non Habet

Nemo dat quod non habet, literally means "no one gives what he doesn't have". This is a legal rule, sometimes called the nemo dat...

Sale of Goods Act (Your Consumer Rights!)

The Sale of Goods Act 1979 states that all goods purchased or sold in the UK must be as described, of satisfactory quality and...