By Harry Scoffin
Yesterday The Telegraph exclusively revealed that the next Labour government will change the law to give relief to existing leaseholders with monetary ground rents.
Labour has adopted the Communities Select Committee proposal of regulating ground rents to 0.1 per cent of a property’s current value, up to a maximum £250 per annum.
A Labour government would restrict property ground rent for all leaseholders in a move that goes far beyond the current government’s planned reforms, Telegraph Money can reveal. There are more than four million leasehold properties in England, but many have unfair charges and restrictions demanded by freeholders.
LKP chief executive Sebastian O’Kelly said:
“It is an excellent proposal. Ground rent has no service whatsoever. It has been foisted on leaseholders by developers, to their detriment.”
Also speaking to the paper, shadow housing minister Sarah Jones commented:
“Ground rents are money for nothing. The scandal of rapidly increasing ground rents, paid to freeholders who offer no service in return, must end.”
The ground rents cap will feature in Labour’s New Deal for Leaseholders, out tomorrow.
The move is expected to put pressure on the ruling party to better its own policy offering on leasehold.
Government has so far failed to move beyond its much-criticised voluntary public pledge with developers and freeholders.
However, according to last week’s response to the Communities Select Committee report, government has not ruled out retrospective legislation to remove onerous ground rents:
“The Government understands the difficulties and frustrations for existing leaseholders who are unhappy about the amount of ground rent they are required to pay and feel their leases should be changed.
As the Committee has recognised, there are many considerations in thinking through the implications of new legislation which would interfere with individual contracts, for instance taking account of Article 1 Protocol 1 of the European Convention on Human Rights and the principle of legal certainty.”
Sharp inter-party rivalry for the leaseholder vote will be played out in the Commons on Thursday, when MPs will get their first full debate on leasehold in many years.
The Backbench Business Committee has agreed the debate as a response to the MHCLG reaction to the Communities Select Committee report. MPs will be discussing a motion on leasehold reform.
Clive Betts MP, the chair of the Communities Select Committee, is set to open proceedings.
LKP asks leaseholders to request their MPs attend the event. They are advised to highlight that briefing notes can be obtained by emailing LKP chair Martin Boyd.