The occurrence of leasehold scandal had caused a rift amongst the freeholders and leaseholders across the United Kingdom, and it has made them overly concerned on what their future in leasehold community is. It has driven most leaseholders to speculate that they have been locked into their leasehold—and they are not wrong at all.
The term “locked into leasehold” is used for describing a situation caused as a result of onerous clauses to their leases. After the leasehold scandal deescalated, it has driven the mortgage lenders to refute the applications from the new buyers, and the rejection of the applications is in congruence with the increasing ground rent clauses, which not many people are adamant on paying to a freeholder. It has made a leaseholder incapable of selling its property to a prospective buyer, and they have started looking for a way out.
In such scenario, a cash buyer wouldn’t pay much attention to the onerous ground rent terms to avoid any potential problem in the future. It would lead to the leaseholders getting locked into their lease agreements, and it would disable their rights to sell the properties for good riddance; therefore, they will remain stuck to pay for the ground rents that they didn’t sign up for.
The government is taking categorical actions in correlation to the ground rent scandal/leasehold scandal for avoiding any potential mishaps in the future. The resolution in the making would benefit the rights of the new homebuyers but, it wouldn’t deal the losses of the affected parties.
Speaking on general terms, the leaseholders who have owned a property for a timespan of two years would reserve rights to purchase freehold or, they would be given an option on extending their lease. Nonetheless, either option would result in a costly step for the leaseholder. On the contrary, the freeholders would increase its premiums, which is not a good news for the leaseholders in trouble.