Leasehold: Ground Rent

Department for Levelling Up, Housing and Communities written question – answered on 17th June 2022.

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Photo of Kim Johnson Kim Johnson Labour, Liverpool, Riverside

To ask the Secretary of State for Levelling Up, Housing and Communities, whether he plans to introduce the second phase of the Leasehold Reform (Ground Rent) Act 2022 to apply to existing leaseholders.

Photo of Eddie Hughes Eddie Hughes Parliamentary Under Secretary of State (Department for Levelling Up, Housing and Communities)

The Government is committed to creating a fair and just housing system that works for everyone and to delivering the second phase of our major two-part leasehold reform within this Parliament.

We have already taken action to end unfair practices in the leasehold market, beginning with the Leasehold Reform (Ground Rent) Act 2022 Act, which will come into force on 30 June. The Act makes homeownership fairer and more transparent for thousands of future leaseholders, by preventing landlords under new residential long leases from requiring a leaseholder to pay a financial ground rent.

We understand the difficulties some existing leaseholders face with high and escalating ground rents. Unfair practices have no place in the housing market. This is why we asked the Competition and Markets Authority (CMA) to investigate potential mis-selling of homes and unfair terms in the leasehold sector. The Government has welcomed this action and wants to see homeowners who have been affected obtain the justice and redress they deserve.

The CMA has secured commitments from Aviva, Persimmon, Countryside Properties and Taylor Wimpey to amend their practices, including commitments to remove lease terms that led to doubling ground rents, houses sold as leasehold and to support leaseholders to buy the freehold at the original price quoted. This is a hugely important step and demonstrates our determination to support existing leaseholders affected by egregious ground rents. We urge other developers to follow suit.

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