Leasehold: Ground Rent

Ministry of Housing, Communities and Local Government written question – answered on 12th February 2021.

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Photo of Daniel Kawczynski Daniel Kawczynski Conservative, Shrewsbury and Atcham

To ask the Secretary of State for Housing, Communities and Local Government, what his policy is on ground rent for leasehold properties for people who will be ineligible for proposed zero ground rent reforms.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under-Secretary (Housing, Communities and Local Government)

The Government has set out a package of measures to tackle unfair practices in the leasehold market and promote transparency and fairness for both leaseholders and freeholders. We will bring forward legislation in the upcoming session to set future ground rents to zero.

We set out the detailed proposals for this policy in our response to the technical consultation Implementing reforms to the leasehold system in England (see https://www.gov.uk/government/consultations/implementing-reforms-to-the-leasehold-system). The measure will also apply to retirement properties. There will be exemptions for community-led development, equity release products known as ‘Home Reversion Plans’ and Shariah Finance compliant ‘Home Purchase Plans’.

We understand the difficulties and frustrations for existing leaseholders who are unhappy with the ground rent they are required to pay and feel their leases should be changed. We are pleased that the CMA is taking enforcement action in relation to two key issues; first, to tackle certain instances of mis-selling of leasehold property and second, to address the problems faced by homeowners from high and increasing ground rents. The Government is keeping a close eye on this issue and will consider any next steps once the CMA have progressed their enforcement action.

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