Lease extensions to get a new lease of life?

We have read with interest about the momentum that’s building for a change in legislation to make lease extensions more straightforward by relaxing the qualification criteria and making it potentially less expensive to process. For example, the current statutory requirement is for the applicant (Leaseholder) to have been the registered owner of the property for at least two years before they can apply for an extension. The negotiating period within this statutory process is long too, and so a lease extension can take over eight months to complete. An unwilling Freeholder and, accordingly, their appointed solicitor, can stall matters unreasonably if not engaged fully with the task in hand. Surely the ‘value’ of lease extensions won’t be tampered with but perhaps the costs associated with processing lease extensions could be? A market has been built on investors acquiring freeholds for the reversion of the flats which is the value attributed to the diminishing lease, the ground rent income and development potential e.g. adding another floor of flats on the roof. In recent years ground rents have been in the press due to the review patterns stipulated in the lease. Are these going to be capped?
Any endeavours to speed up and simplify the process of leasehold enfranchisement but which don’t buck a legitimate market for investors must surely be encouraged?
The Law Commission consultation paper on Leasehold Reform is currently out however they are not due to report until the latter part of 2019, so it is unlikely that we will see any changes in the law until 2020.
The key point to remember is that at present, under the Act, as soon as the lease drops below 80 years the premium increases considerably as marriage value becomes payable. Marriage value being the difference in value between the extended lease and the aggregate of the tenant and landlord interests at the date of valuation. For a £1,000,000 flat with minimal ground rent, the premium will increase by over £20,000 overnight as the lease drops to 79 years. Have you checked your lease length recently?
We work closely with Egerton, specialists in leasehold enfranchisement with many years of experience; please contact your local Jackson-Stops’ branch to discuss requirements you may have.