Industry response

BSA response to Law Commission consultation; Leasehold home ownership: buying your freehold or extending your lease.

The BSA welcome the Law Commission’s proposals which support governments recent work to simplify and make the leasehold process more fair for leaseholders.  The paper looks at simplifying the enfranchisement process, reforms include:

 Removing technical barriers and complexities in the rules governing eligibility for enfranchisement rights

  • Replacing the current right of leaseholders of houses to purchase a one-off 50-year lease extension at a high ground rent with a right to acquire unlimited longer lease extensions without a ground rent
  • Enhancing enfranchisement rights for owners of leasehold houses on estates with shared services
  • Removing the requirement that leaseholders must have owned the lease of their home for two years before making a claim
  • Improving and simplifying the enfranchisement procedure, so that it contains fewer traps for the owners of leasehold houses, is easier to operate, and is less likely to result in protracted and costly disputes between the parties.

As part of its proposals, The Law Commission is also looking at ways to reduce the price that leaseholders pay for a freehold. Two options have been put forward including:

1.    The introduction of a simple formula which is not based on the market value of the interest being acquired by the tenant (e.g. ten times the ground rent or 10% of the value of the property)

2.    A premium based on market value that more closely resembles the current regime, but which would remove the marriage value element and/or involve the prescription of standardised rates to be used in the calculation.

Read the full response here.


Harinder Chohan

Policy Manager

Tel: 02075205922