Sky News reports that a faction of up to 30 Conservative Members of Parliament is poised to rebel against the government’s stance on ground rents for leasehold properties, as reported by Estate Agent Today.
In a letter addressed to Chancellor Jeremy Hunt, these MPs highlight the Conservative Party’s 2019 manifesto commitment to implementing a peppercorn system, where ground rent is minimal. Presently, there exists no cap on the amount freeholders can charge existing leaseholders for ground rent.
The MPs urge Hunt to fulfil the party’s pledge, emphasising the financial strain faced by many constituents due to the current leasehold system. They advocate for reforms aligning with classic Tory ideals of fostering a “property owning democracy,” calling for an end to what they term the “feudal” nature of leasehold arrangements.
Housing Secretary Michael Gove has previously criticised leasehold as a “feudal system,” echoing sentiments for reform within the party. However, there’s opposition from groups like the Pensioners for Ground Rent Association, who argue against any cap on ground rent, citing concerns over interference in UK contract law and financial implications for institutions invested in ground rent portfolios.
What’s more, members of the House of Lords are deliberating on the details of the Leasehold and Freehold Reform Bill. The proposed legislation aims to streamline processes for leaseholders to extend their lease or purchase the freehold, increase transparency regarding service charges, and prohibit the creation of new leasehold houses, among other provisions.
Key elements of the bill include extending the standard lease term to 990 years with ground rent reduced to a nominal amount, expanding eligibility criteria for leaseholders seeking to extend their lease or purchase the freehold, and enhancing protections for both leaseholders and freehold homeowners.
The bill also addresses concerns related to building safety and aims to strengthen leaseholder protections in accordance with the Building Safety Act 2022.
2 responses
The Government and the opposition have left themselves exposed. They have made several comments about wanting to see amendments to Leasehold, they have remedied ground rent on new build, they have made steps on leasehold houses but they have left existing leaseholders exposed. The not so quiet rolling back on their pledges has not gone down well with industry insiders and has been noticed. It was foolish of Michael Gove to think they could let this drop. I agree with the ‘rebels’, they should rebel at the inaction on this.
There are almost 5 million leaseholders in this country.
The political parties must be completely inept if they cannot see that abolishing leasehold will guarantee them a victory in the coming election.