Leasehold Reforms and the Retirement Sector
In January, as part of the biggest reforms to English property law for 40 years, the Government announced a set of reforms for leaseholders including the controversial decision to reduce ground rents to zero for all new retirement properties. This might have consequences on the emerging policy in Local Plans to deliver specialist homes for the elderly, in a viable and deliverable manner.
Retirement housing providers have heavily criticised ministers’ removal of exempting the retirement sector to the ground rent ban, whilst the government has argued that the move will protect older people. Significant costs are associated with the construction of communal spaces within retirement developments for which ground rent has traditionally be used to subsidise these costs.
Though the implications are yet to be fully explored, the removal of ground rent for new build retirement properties brings in to question the viability of building specialist housing for older people. At the very least this move may threaten the quantity and quality of communal spaces provided in future developments. This might have an impact on the delivery of specialist housing through Local Plans, and the consequential need for development to be viable.
Further information on leasehold reforms can be found within the following press release: