The 2 year ownership requirement in relation to leasehold enfranchisement will be removed on 31 January 2025.
This means that to qualify for a statutory lease extension of a flat or a house, or to qualify to acquire the freehold of a leasehold house, the lessee will no longer have to have owned the property for at least 2 years.
As new owners will not have the 2 year wait, in many cases this should remove the need for the existing owner of a flat or leasehold house to begin the statutory lease extension or freehold acquisition process to avoid a purchaser otherwise having to wait to qualify for a statutory lease extension or freehold acquisition.
The claim can still be started by the existing owner and transferred to the purchaser on completion of the sale of the property as before. This approach may be needed for example if the unexpired term of the lease is nearing 80 years, when marriage value becomes payable. The existing owner could start the claim before the 80 year threshold is reached so as to avoid marriage value having to be paid. The claim can be transferred to the purchaser on completion of the sale of the property, who can then continue the claim.
Existing owners who wish to sell their properties might still have to extend their leases if the lease is currently too short for lending purposes, or if the purchaser does not want to deal with extending the lease. In these circumstances, a voluntary lease extension is normally obtained (if this can be agreed with the landlord) since the timeframe for completing a statutory lease extension is often too long to fit the timeframe for completion of the sale of the property.
More leasehold reforms are still to be introduced and we look forward to further developments in the coming months.
If you have any queries, please do not hesitate to email me or contact the team on 020 8858 6971.