Ground rent on existing homes set to be capped
The Government is expected to include a bill in next week's King's Speech limiting ground rent to a peppercorn rate.
Ground rent on existing homes is set to be capped at a peppercorn rate as part of an overhaul of leasehold law to be included in next week’s King’s Speech.
A bill is expected to ban controversial leaseholds on new houses, but retain it for flats.
The Sunday Times reported that existing ground rents would be capped at a very low rate, and that the standard lease extension would increase from 90 to 990 years.
Spate of cases
Legislation already limits ground rents on new build properties, after a spate of cases where developers raised the ground rent significantly each year.
The Department for Levelling Up, Housing and Communities estimates that there are almost five million leasehold homes in England, 70% of which are flats. Almost all flats are sold on a leasehold basis compared to 7% of houses.
Matthew Pennycook, shadow housing minister, says that Labour would fundamentally reform the leasehold system.
Fit for purpose
Timothy Douglas, head of policy and campaigns at Propertymark, says: “Many agents and leaseholders will be relieved to hear of plans for new legislation to further reform the leasehold system.
“Enfranchisement must be made easier, loopholes in redress must be closed, ground rent restrictions must be extended, and the UK Government must ensure any legislation to abolish leasehold improves consumer confidence and is fit for purpose.”
Propertymark has been lobbying on the leasehold market since 2017 when problems with new-build leaseholds first hit the headlines.
Government ‘to cap ground rent’ as plans to scrap leasehold abandoned
https://www.theguardian.com/commentisfree/2023/nov/04/the-observer-view-on-the-antiquated-leasehold-system
Very Good , But All existing leasehold could automatically have their leases extended to 990 year leases with zero/peppercorn ground rent . Why should a buyer 25 years ago buying a house with 25 year mortgage still own outright as Freehold . But a Flat leaseholder would need to extend their Lease ! it’s been daylight robbery for years . The Leasehold was never meant to pay more money from the freeholder it was a way of creating 2 or more separate properties on the same freehold land .