Consultation outcome not yet published
In response to the UK Government’s Modern Leasehold consultation in November 2023 Propertymark strongly supported proposals to limit ground rents to a peppercorn for existing leases, bringing them in line with new residential leases.
Demonstrating the influence of our long-standing campaign for leasehold reform, the consultation document referenced Propertymark research on the impact of ground rents on the property market, outlining that 78% of members reported that a leasehold property with an escalating ground rent will struggle to sell, even if priced correctly.
The outcome of the consultation has not yet been published, with the Department for Levelling Up, Housing and Communities saying the feedback is still being analysed.
Political support undermined by financial interests
The move to effectively ban ground rents was seen as a positive step for leaseholders, and had broad support, including from Levelling Up, Housing and Communities Secretary, Michael Gove, MP, who clearly expressed his preference for this option.
However, a number of pension and insurance funds have invested huge sums in ground-rent portfolios and analysis by HM Treasury suggests that up to £37bn of investment could be wiped out, which may lead to compensation claims aimed at the UK Government. This position is supported by the British Property Federation who state that abolishing existing ground rents could negatively impact pension savers.
Propertymark campaigning
Propertymark has long argued that policymakers need to do more to create a level playing field between people who own new and existing leasehold property. We continue to work with our members and UK Government Ministers to ensure that the Leasehold and Freehold Bill doesn’t leave any leaseholder behind.
Our latest report, Leasehold 2023: Has Anything Changed? shows property agents and consumers are still experiencing difficulties with several areas relating to leasehold law. Members have told us about their concerns regarding the short period of many leases, the high cost of renewing a lease, difficulties obtaining information from management companies, and the need for more clarity on processes and rights for acquiring the freehold.
