Expert Insights on the Market
The Leasehold & Freehold Reform Act 2024 has generated diverse opinions among real estate professionals, with varying predictions on its impact.
Many anticipate a surge in demand for leasehold properties, especially those with shorter leases, due to the removal of marriage value in lease extensions. This could increase prices for these properties while decreasing demand for freehold properties.
Investors may need to adjust strategies as the Act might reduce the attractiveness of leasehold properties as investment assets due to capped ground rents and increased leaseholder rights. However, the increased demand for leasehold properties could also create opportunities for investors.
In the rental market, the Act’s impact is likely minimal in the short term. Long-term effects could emerge as more leaseholders transition to freehold ownership, potentially reducing rental supply.
What Property Owners Need to Do
Following the introduction of the Leasehold & Freehold Reform Act 2024, property owners need to carefully consider their next steps.
Leaseholders
- Review your lease agreement to understand your rights and obligations.
- If eligible, consider converting your leasehold to freehold through the simplified enfranchisement process.
- Seek legal advice for guidance on lease extensions and negotiations with your freeholder.
- Stay informed about updates to the law and your rights as a leaseholder through Government updates.
Freeholders
- Ensure compliance with new regulations concerning ground rents and service charges.
- Establish and maintain open communication with leaseholders and address any concerns promptly.
- Consult with legal and financial experts to understand the impact of the Act on your property portfolio.
For further information and support, refer to government guidance, seek advice from property solicitors, or contact relevant professional organisations.
Conclusion
The Leasehold & Freehold Reform Act 2024 ushers in significant changes, benefiting leaseholders through more affordable lease extensions, capping ground rents, and increased rights. Understanding these changes is crucial for lease and freeholders to navigate the evolving property landscape.
Leaseholders can now take greater control of their property ownership journey, while freeholders must adapt to the new regulations. Both parties should seek professional advice from legal and financial experts to fully understand the Act’s implications.
By staying informed and seeking guidance, property owners can confidently make informed decisions and thrive in this new era of property ownership.