POSSIBLE reforms to the controversial leasehold system in England to clamp down on high costs when extending a lease have been given a mixed reception by industry experts.

The Government says its proposals should help those with shorter leases fearing bills of many thousands of pounds.

Former council tenants who bought their homes in the 1980s are likely to be among those who could benefit.

Campaigners gave the complex proposals, which could affect up to 4.5 million homes, a guarded welcome.

While they welcome protections for leaseholders in the future, many believe they should be paid compensation for unjustified charges and rents in the past.

Housing Secretary Robert Jenrick said: “Across the country people are struggling to realise the dream of owning their own home but find the reality of being a leaseholder far too bureaucratic, burdensome and expensive.”

The reform will provide leaseholders the option to extend their lease by a maximum term of 990 years at zero ground rent. Leaseholders of houses have only been able to extend their lease for 50 years once and pay a ground rent. Flat owners have been able to do this multiple times with a peppercorn ground rent rate for 90 years.

Additionally, leaseholders have often faced expensive charges to extend their lease. However, this will change, including getting rid of certain costs, such as the 'marriage value'. This has forced leaseholders to share any potential profit from extending a lease with the freeholder.

There will also be a cap on ground rent payable after a leaseholder extends the lease or buys the freehold.

An online calculator will make it easier for leaseholders to find out how much it will cost to do either.

Many homeowners will see direct benefits from this leasehold reform with 4.5 million saving up to thousands to tens of thousands.

It will also allow leaseholders to buy a freehold more cheaply. This leads to lower home ownership costs and more straightforward transactions when buying or selling a property.

On top of that, it could make more homebuyers open to buying properties with shorter leases. This could lead to fewer properties sitting empty with short leases or high ground rents in place.

Mark Hayward, chief policy adviser for Propertymark, the professional body for estate agency staff, said: “While we welcome the government’s initiative to reduce ground rents to zero for all new retirement properties, we would argue this needs to be extended to all retirement properties to create a level playing field.”

Anna Bailey, founder and chief executive officer of the Leasehold Group, which advises clients on leasehold solutions, said: “I am genuinely concerned that the reforms proposed will in reality change very little for ‘millions of leaseholders’ and are nothing more than window dressing.

“We – and the clients for whom we are working – urgently need more clarification on how, and crucially when, the reforms will actually be implemented.”