New leasehold plans could make homes more valuable, according to a new study, with one UK region noticing the biggest boost.
This comes as proposals have been made to cut ground rents.
Earlier this month, Housing Secretary Michael Gove launched a consultation with options to target ground rent.
This included capping ground rents for existing leaseholders and freezing ground rents.
Liam Halligan house prices on the money
The proposal was made as some leases include ground rent clauses that could see payments spiral.
Current proposals would put a stop to this and could even increase home value.
This is according to research by Knight Frank and Bayes Business School.
It suggested the current proposals could boost property prices by around 10 per cent.
The average house price in the UK was £288,000 in June 2023, according to the latest data from the Office of National Statistics.
A 10 per cent increase could boost the average house price by around £28,000.
The research showed the proposals could cause a total home value increase of £10.9billion with London seeing the biggest increase.
This would an increase in stock value of around £4.2billion in London, £2.2billion in the West Midlands and £1.3billion in the South East.
The experts suggested there are pros and cons to the proposals.
Partner and head of leasehold reform and litigation at Knight Frank Jeremy Dharmasena said: “The Government’s initiative towards simplifying leasehold reform, particularly in the extension of leases from 90 years-plus to 990 years, comes with positives and negatives.
The average house could sell for £28,000 more
“The changes will provide tenants with a sense of stability, ensuring certainty and enhancing the marketability of their properties, which can be seen as a positive step in the right direction.
“However, I’d caution against retroactively capping ground rents, as it will have a significant impact on pension funds and existing contracts, due to a loss of rental income.
”Abolishing marriage value, as highlighted in James Culley’s paper, will inevitably create further challenges including concerns about legal issues and affordability for homeowners. While reducing premiums may seem beneficial, it will lead to a fall in Stamp Duty Land Tax revenue.”