Communities Secretary pays tribute to Sir Peter and ‘campaigners’ for fighting ‘rip-off practices in the leasehold sector’
By Harry Scoffin
APPG co-chair Sir Peter Bottomley pressed Communities Secretary Robert Jenrick over long-awaited leasehold reforms last week.
Speaking via video link on May 13, the veteran Conservative MP used news of plans to “safely” reopen the housing market to remind Mr Jenrick of peppercorn ground rents and a ban on leasehold houses.
“The Secretary of State is right to talk about people living their lives. Most of the people going to new homes will be going to leasehold ones,” said the Father of the House.
The Worthing West MP continued:
“When will he, and we, act to ban the sale of leasehold and pre-sold houses? When can he announce actions for justice for leaseholders and lease renters who are stuck with excessive ground rents?”
Sir Peter suggested that wealth eroding leasehold games would not be tolerated in the post-coronavirus economy, and plugged LKP and its parliamentary wing:
“Can he advise residential landlords [freeholders] and smart developers that the financial games are over, and that the Leasehold Knowledge Partnership and the all-party group on leasehold and commonhold reform are going to make sure that there is justice for leaseholders?”
It comes as new housing minister Lord Greenhalgh told MPs that unscrupulous freeholders – including those hiding their beneficial ownership behind shell companies and nominee directors – should be made “pariahs” after the pandemic.
Paying tribute to the work of Sir Peter and other “campaigners”, Mr Jenrick was able to reveal that the “draft legislation” will be with MPs for scrutiny “shortly”.
This could be as early as before the summer recess.
The Communities Secretary explained that the government is opposed to “rip-off practices in the leasehold sector” which, he said, “in general … have reduced enormously as a result of the government’s firm stance and that of campaigners, including many members across the House. I want to see that continue.”
LKP understands he is referring to a steep fall in the number of new-build houses being sold as leasehold.
“The proportion has fallen substantially: from 16% in March 2017 to 1% in June 2019. The 2017 Government’s stated intention to legislate against this practice may have had an impact on this,” said the Commons Library in a recent briefing paper to MPs.
Mr Jenrick’s hard hitting leasehold rip-offs rhetoric echoes the language of James Brokenshire and Sajid Javid, his predecessors who railed against “the ground rent gravy train” and “leases that put corporate profit over consumer protection”.
Mr Jenrick is the latest in a line of Conservative ministers committed “to legislating to bring ground rents down to a peppercorn [zero financial value], and to ensuring that no new homes are built as leasehold properties except in the most exceptional of circumstances.”
The measures were first announced by Sajid Javid in December 2017, as part of his crusade to “liberate” consumers from “feudal practices” in the leasehold market.
Mr Javid’s replacement James Brokenshire reconfirmed the policies in June 2019, after a heavily publicised consultation that attracted over 1,200 responses.
LKP has repeatedly called for an end to the trade in freehold titles, with zero ground rents stopping future homes from being hoovered up by investors.
Deprived of the ability to sell on ground rents, developers would be left to hawk heavily discounted freeholds for the more dubious incomes, risking their reputations.
Removing the main financial incentive to sell flats as vulnerable tenancies paves the way for a new-and-improved commonhold.
The peppercorn rents policy also featured in the 2019 manifesto of Boris Johnson’s Conservatives. It has support from Labour, who included it in their most recent programme for government, and the Liberal Democrats.