Question to the Ministry of Housing, Communities and Local Government:

To ask the Secretary of State for Housing, Communities and Local Government, if he will bring forward legislative proposals on proposed limits on the cost of extending a lease; and if he will make a statement.

Under the current system, too many leaseholders find the process for extending their lease or buying their freehold (a process known as enfranchisement) too complex, lacking transparency and prohibitively expensive. We will reform the process of enfranchisement valuation that leaseholders must follow to calculate the cost of extending their lease or buying their freehold.

The Government will abolish marriage value, cap the treatment of ground rents at 0.1% of the freehold value, and prescribe rates for the calculations at market value. The Government will also introduce an online calculator, further simplifying the process for leaseholders and ensuring standardisation and fairness for all those looking to enfranchise. These changes to the enfranchisement valuation process will result in substantial savings for some leaseholders, particularly those with less than 80 years left on their lease.

Through our reforms, the length of a statutory lease extension will increase to 990 years, from 90 years (for flats) and 50 years (for houses). Leaseholders will be able to extend their lease with zero ground rent on payment of a premium. Leaseholders will also be able to voluntarily agree to a restriction on future development of their property to avoid paying ‘development value’

The Law Commission’s report on enfranchisement includes recommendations relating to lease extensions, including payment of costs incurred by this process and the terms of the new lease. We will bring forward a response to these and the other remaining Law Commission recommendations in due course.