Leaseholders are given the opportunity to own their buildings

There are finally plans to update the system for leaseholders in England Wales. The new system could make it easier and cheaper to buy the freehold of their building. All in all, the government plans to make a fairer housing system.

What is a leasehold?

A leaseholder owns the property, not the land it is built upon. You may have a legal agreement with the landlord that tells you how many years you can own the property. When the lease ends, the property returns to the landlord. For example, many people own flats in high rise buildings but do not own the land they are built upon. A ‘freeholder’ owns the property and the land for an unlimited period.

What was the old system?

The old system left many leaseholders with extortionate lease extensions, huge ground rents and random service charges. Freeholders exploited leaseholders with maintenance and management charges. The entire process left freeholders raking in the cash and leaseholders plummeting into debt. In fact, England and Wales are some the only countries in the developed world where you can buy a home and not own it. Moving forward, The Law Commission aims to sell flats as “commonhold”.

What will the new system change?

Homeowners have been invited to share their views on the proposals from the Department for Levelling Up, Housing and Communities. The new system should allow more leaseholders living in mixed-used buildings to take control of their buildings. Leaseholders will have more input into their building, and hopefully, better ownership.

But – some of the old processes will still apply

Unfortunately, some of the old systems will remain in place in the housing industry. There have been many questions about stamp duty tax in the media. During the height of the pandemic, the government announced a stamp duty holiday. We could purchase homes with reduced stamp duty tax and save a considerable amount of money. The stamp duty holiday was phased out in September – and the property market was left empty. Stamp duty tax isn’t going anywhere, despite the new regulations.

Buying a new home is a difficult and often complicated process. A conveyancing solicitor can help you navigate the system and transfer property ownership. Whether you are buying or selling a home – a conveyance solicitor can handle the contracts. Let the legal professional handle the paperwork so you can keep everything above board.

If you’re looking to purchase a new home, you need to familiarise yourself with the new laws and regulations. You might be able to save some money and avoid unexpected charges later down the line. Become a homeowner and bid farewell to surging rent prices and petty landlords.