Leaseholders left playing ‘stick or twist’ over govt reforms: Cavendish

Press – Altura Mortgage Finance

The government’s slow progress on leasehold reform has left many of these homeowners playing a high-stakes game of “stick or twist”, says Cavendish Legal Group.

Leaseholders who want to move this year are unsure whether to sell up, or hang on until Housing department proposals come into force, adds the conveyancing firm.

In January, Housing secretary Robert Jenrick said the government would allow the country’s 4.5 million leaseholders to extend leases by 990 years and scrap ground rent, among other long-awaited reforms to this part of the market.

But seven months later, the Housing department has not set out a timetable for when these plans will be passed into legislation.

Cavendish says: “Without a timetable for implementation homeowners who would have started leasehold enfranchisement proceedings to secure their home this year, are left in limbo as they wait for reform to be implemented — while all the time the clock is ticking on their lease.”

The firm adds the impact of the pandemic the damage to income it has caused, adds extra pressures on leaseholders who want to move this year.

Cavendish Legal Group litigation partner Jonathan Frankel says: “The frustrating lack of progress on this issue is forcing many leaseholders into very difficult decisions and what we are seeing is two distinct groups emerging as a result.

“For landlords it may not be such a big issue as they’re likely to be generating income from their property and can probably afford to wait it out.

“But there are a lot of leaseholders who desperately want to start enfranchisement proceedings to secure the freehold, or seek a lease extension, on their property and they are now in a potentially very costly waiting game.

“These are people who ordinarily could have started down that route but are waiting for these reforms to kick in, so they’re not in the market right now.

“It’s like an extremely high stakes round of cards where leaseholders are being left to gamble on whether they should stick or twist; either wait for the reforms to be implemented or act now.

“It is a desperate position to be in, particularly for leaseholders who need to sell up this year or whose leasehold has only a limited number of years left to run.”

Credit: Roger Baird