By Harry Scoffin
One of the best aspects of the Communities Select Committee’s excellent report into the broken leasehold system, was that Conservative MPs ended up as vehemently opposed to it as Labour ones.
Last month Bob Blackman, Tory MP for Harrow East, secured another mini victory at Prime Minister’s Questions.
Theresa May committed to “peppercorn” ground rents, which as nearly everyone knows is zero financial value.
Unfortunately, among those who are a bit hazy on what peppercorn actually means are government minsters. Perhaps even the prime minister.
Nonetheless, it is good that she was referencing peppercorn ground rents rather than the £10 nominal ground rents talked up by DCLG ministers.
Heather Wheeler, a housing minister, seems to have a fairly elastic view of what peppercorn means, even though Philip Rainey QC has taken the trouble to tell government in clear terms that it means: no monetary value.
Bob Blackman has also been a critic of his government’s endorsement of the developers’ and freeholders’ code of practice.
This bit of PR flannel was dreamed up by the Home Builders Federation some years back, and went nowhere under Sajid Javid, when he was Communities Secretary.
Mr Blackman told the prime minister on April 10 that the leasehold market was “broken” and asked:
“Does my right honourable friend agree with me that we cannot rely on voluntary codes to set this right and that we need legislation in this house to restore fairness to the housing market?”
The prime minister referred to the work by Lord Best to look at regulating and professionalising managing agents.
Mrs May also suggested that the government was investigating whether house lessees should be given the Right of First Refusal that flat lessees currently enjoy. Of course, there was no mention of how developers already circumvent this clause in the Landlord and Tenant Act 1987 through a transfer of shares, rather than a transfer of the property.
She also conceded that “my honourable friend is absolutely right. If we believe that a market is not working properly, then we should act to deal with that.”
Mr Blackman has since doubled down on his PMQs intervention in comments to the Parliamentary Review:
“Voluntary codes cannot be relied upon and therefore I call on the government to legislate to protect leaseholders and to restore fairness.”
All very encouraging.
Related posts:
Jenrick tells Bottomley: Bill to set new ground rents at peppercorn coming ‘shortly’
Still hope for zero ground rents, says Brokenshire. Please end them for retirement too, says LKP
Government is hiding behind Law Commission and CMA, says Tory MP Bob Blackman
‘Peppercorn’ ground rents on Help To Buy properties … from next year
Lobbying alert: Theresa Villiers MP speaks up for ground rents, freehold owners and making sure marriage value still pays off for freehold investors
Leaseholder and judge Suki Johal wins war over her patio that has cost £250,000
Since when has Theresa May committed to “Peppercorn” Ground Rents (GR) as nearly everyone knows is supposed to have Zero Financial Value. It seems Governments have not known either, a top QC states Peppercorn GR has “No Monetary Value”.
Why then have us, 28 residents, paid £44,352 for the first 33 years of a 99-year lease and for the next 33 years this doubles to £88,704 and then doubles again for the final 33 years to £177,408. The total we will have paid will be £310,464 for what has been stated by a top QC as “Having no Monetary Value”?
Leaseholders cannot rely on any Voluntary Codes to set this right as we already have the RICS Code which is almost totally ignored by MA and the FTT has many RICS running this QUANGO, where it is known the Freeholders have the upper hand.
The PM mentioned work by Lord Best who looked at regulating and professionalising MA. This, in my opinion, is really necessary as the MA and Landlord Agents are the main cause of Leasehold Exploitation.
We know Developers already circumvent the Right of First Refusal in the Landlord & Tenant Act by Transferring the Shares to a Sister Company, where it has been known for them to charge up to 10 times the original cost to purchase the Freehold.