The CJC is an Advisory Public Body which was established under the Civil Procedure Act 1997 with responsibility for overseeing and co-ordinating the modernisation of the civil justice system. We meet at least three times a year to discuss and agree formal responses to consultation papers.
The Civil Justice Council, an advisory body chaired by master of the rolls Sir Terence Etherton, said the prohibition of leasehold sales should be a ‘last resort’ and it urged the government to find other ways to tackle abuses of the system.
The advice was made public yesterday by the Law Society Gazette.
It is extremely disappointing to see this submission (below) from the Civil Justice Council.
On ground rent increases, the response endorses linking rises to the Retail Price Index, or setting the maximum rent for new build properties at 0.1% of the property value.
‘There is no simple answer to this question,’ adds the response. ‘If leasehold properties are sold at a freehold value, then ground rents should stand at a peppercorn or nominal rate. However, if the price has been significantly reduced to reflect its leasehold status, there is nothing in principle to stop a developer charging a ground rent provided that this is not open to abuse and the property does not become unsaleable in the future.’
TheCivil Justice Council pointed out that if the proposed ban goes ahead, developers may attempt to recoup the income they lose by raising other charges.
There is no evidence of this whatsoever.
Land Registry data shows that leasehold houses have been sold at no discount compared to freehold houses, and that sales have been fuelled by taxpayer assistance through the Help To Buy scheme.
The Civil Justice Council submission is here: