Auto Amazon Links: No products found.
A parliamentary committee has called for the government to accelerate the introduction of a £250 annual cap on ground rents paid by leaseholders in England and Wales. Currently, the government plans to implement this limit by late 2028, but the cross-party Housing, Communities and Local Government Committee argues that leaseholders have endured a long wait and recommends bringing the cap into effect by late 2027. The government has emphasized it is treating leasehold reform as an urgent priority and aims to end the leasehold system within the current Parliament, which could extend to 2029.
Approximately five million homes in England and Wales are leasehold properties, where residents own the right to occupy a property for a fixed term but pay ground rents to freeholders. Ground rents are distinct from service charges, which cover building maintenance and management. In 2023/24, the English Housing Survey found the average annual ground rent to be £304, but many ground rents increase periodically, sometimes doubling or rising with inflation, causing issues for leaseholders trying to sell or mortgage their homes.
The government’s proposed Commonhold and Leasehold Reform Bill, currently under committee review before being presented to Parliament, intends to ban the sale of new leasehold flats and promote the switch to commonhold arrangements, where residents collectively own and manage their buildings without a lease expiry. The draft bill sets the £250 cap to take effect at a minister-determined date, likely late 2028, but the committee insists it should apply within two months of the bill’s enactment, potentially placing the timeline in 2027.
The report also highlights concerns over the planned 40-year transition period to reduce ground rents to a peppercorn rate, or near zero. While freeholders and investors suggest they need this time to adjust, the committee questions the necessity, pointing to government intentions to cap rents for several years. Those affected by soaring ground rents shared stories of properties becoming effectively worthless or unmortgageable, impacting their personal and financial lives. The committee praises the bill for advancing leaseholder rights but urges revisions to fully meet expectations and commitments. It also recommends establishing an independent regulator to oversee property management agents, addressing complaints about unchecked service charge increases and poor management
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found.