Explanatory note

These Regulations prescribe the formulas to be applied when calculating the price payable for a minor superior tenancy (as defined in paragraph 7A(2) of Schedule 1 to the Leasehold Reform Act 1967) or the value of a minor intermediate leasehold interest (the term “minor intermediate lease” is defined in paragraph 7(3) of Schedule 6, and paragraph 8(3) of Schedule 13, to the Leasehold Reform, Housing and Urban Development Act 1993).

The formulas use the published “over 30 not over 30.5 year” National Loans Fund interest rate (this provides the value for “Y” in the prescribed formulas). National Loans Fund interest rates are published on the UK Debt Management Office website at www.dmo.gov.uk. The interest rates are published as percentage rates and need to be converted into decimal fractions (divided by 100) before they can be used in the prescribed formulas.

An impact assessment of the effect that this instrument will have on the costs of business is available from the Department for Communities and Local Government, 2 Marsham Street, London, SW1P 4DF and is published with the Explanatory Memorandum alongside this instrument at www.legislation.gov.uk.