News
Ground rent abolition on the verge of becoming law
Friday 28th January 2022
Ryan Bembridge
The Leasehold Reform (Ground Rent) Bill is on the verge of becoming law after passing through the Houses of Commons and Lords.
Ground rents will be reduced to a 'peppercorn' rate, meaning new leaseholders will no longer be punished with escalating ground rents.
The bill could have been more far-reaching, as a Labour amendment that would have seen ground rents removed from existing leasehold properties was defeated by 306 votes to 162.
Labour MP Mike Amesbury said: "A feudal system of kings and barons needs to be kicked into touch. It is unjust and it is unfair.
"The bill represents the picking of a single apple in the orchard.
"Leasehold is a system hundreds of years old. A 28-page bill is not enough to finish it off, and we do need to finish it off."
He called for a "clear timetable" for further changes.
Conservative MP Theresa Villers said the amendment "amounts effectively to a confiscation of existing property rights".
She spoke of the "myriad financial and legal responsibilities and keep up to speed with a rapidly changing and complex regulatory environment" that professional freeholders currently deal with, which would be passed onto leaseholders.
Meanwhile Conservative MP Desmond Swayne said: "for many people in the retirement sector, it will be in their financial interest to pay a lower purchase price and have a continual ground rent, rather than to pay a significantly greater capital sum upfront."