This consultation sets out a series of options for how the government could intervene to cap the ground rent leaseholders have to pay.
The government has already legislated to ensure that new residential leases are restricted to a peppercorn ground rent. This consultation sets out a series of options to extend this protection to existing leaseholders.
The consultation outlines five options including;
- capping ground rents at a peppercorn
- setting maximum financial value for ground rent
- capping ground rents at a percentage of the property value,
- limiting ground rent to the original value when the lease was agreed
- freezing ground rent at current levels.
This work builds on the governments existing programme to deliver a better deal for leaseholders including the Ground Rent Act 2022 which limits ground rent on new leases to one peppercorn per year – effectively setting the rate to zero.
The Leasehold and Freehold Reform Bill – which will be introduced to Parliament soon – will go further. It delivers on the government’s manifesto commitment to make the leasehold system more transparent, protecting the millions of people who own a leasehold property.
Today’s public consultation will be open for six weeks and the government will carefully consider all responses before responding. Subject to the outcome of the consultation we aim to introduce reforms through the Leasehold and Freehold Reform Bill. Secretary of State for Levelling Up, Housing and Communities, Michael Gove said:
“People work hard to achieve the dream of homeownership. They plan, toil, sacrifice, save and should rightly be proud to get on the housing ladder. However, far too many are burdened with onerous ground rents – these punitive charges can leave some paying thousands of pounds a year for nothing in return.
Ground rent can feel like an annual reminder that you do not own the land your home stands on, that your lease on it is finite, and that there is a payment for the privilege of staying there.
Today we are taking further steps to right that wrong – consulting you, the public, about how best to change this system so leaseholders are not exploited any longer and can take back control of their own destiny.”
One Response
The government will always take the easy route if it can and talk a lot but actually do absolutely nothing!