I have been involved in leasehold reform for many years, serving on the then-named Communities and Local Government Select Committee (now the Levelling Up, Housing and Communities Select Committee), and have often advocated for the rights of leaseholders regarding this issue (please see a line of question I followed on the Select Committee here and a question I posed in the Commons to the Government here).
As you are likely already aware, the Leasehold Reform Bill passed its third reading on the 24 January 2022 and, as of 8 February, it has achieved Royal Assent and is now an official Act of Parliament. The Bill seeks to end ground rents for new qualifying residential long leases.
Leasehold is a centuries-old system that is unjust and unfair in my view. The Bill marks a milestone in putting an end to it and is a good attempt at preventing future wrongs, but I do not believe it will be enough to finish off this antiquated system.
The Bill is very narrow in scope and does not address many issues affecting existing leaseholders. It will not deal with existing ground rents, untransparent service charges or management agent fees. Nor will it force accountability on freeholders or managers for their actions or deal with unfair contract terms or issues with insurance. I believe the Government must do more, sooner rather than later.
I supported a new clause that would have ended ground rents for existing long residential leases – not just new ones. I believe this would help improve the lives of the 4.5 million people trapped in this feudal system, especially some 1.4 million of them who are in houses and may be experiencing high ground rents on top of other exploitative terms built into their leasehold contracts. Disappointingly, the Conservative Government defeated this new clause.
I opposed an amendment that would have prevented zero ground rents from applying to some retirement properties. While I appreciate the concerns raised by retirement community developers, I do not believe they outweigh the need for those buying retirement properties to be treated fairly as consumers. The Government has compromised by giving a longer transition phase for retirement properties and I support that approach.
The Competition and Markets Authority’s investigation into leasehold developers has shone a light on what I believe is a leasehold scandal. Developers have been exposed and are now responding by ditching the practice of doubling ground rents every ten years.
While I welcome the Government’s consultation on wider leasehold reform, we have had consultations before. What we need to see, in my view, is real and fundamental change.
I hope there will be more opportunities in the future to push for further and more radical reform on this issue, leaseholders deserve fair treatment and to be free of exploitative practices – as a result I will continue to be a strong voice on this issue as I serve in Parliament.