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Ground Rents (Leasehold Properties) Bill - Clause 1: Reducing ground rent on new residential long leases to a peppercorn.
29 November 2021
Lead MP
Eddie Hughes
Debate Type
Bill Debate
Tags
Housing
Other Contributors: 34
At a Glance
Eddie Hughes raised concerns about ground rents (leasehold properties) bill - clause 1: reducing ground rent on new residential long leases to a peppercorn. in the House of Commons. Other MPs contributed to the debate.
How the Debate Unfolded
MPs spoke in turn to share their views and ask questions. Here's what each person said:
Lead Contributor
Opened the debate
The Bill aims to reduce the ground rent on new residential long leases where a premium is paid to a peppercorn, making home ownership fairer and more transparent for future generations. It will prevent future onerous ground rent clauses and improve the leasehold system by addressing issues such as spiralling ground rents and unfair terms that have turned homeownership into a nightmare for some leaseholders.
Desmond Swayne
Con
New Forest West
Lobbied for an exemption for the retirement living industry which was granted but then withdrawn in January this year, questioning why that happened.
Chris Bryant
Lab
Rhondda and Ogmore
Questioned why leasehold exists at all, suggesting it is a feudal relic, proposing commonhold as an alternative for flats which is used in other countries. He also raised concerns about the complexity of leasehold.
Catherine West
Lab
Hornsey and Friern Barnet
Expressed concern over greedy developers imposing annual increase ground rents, naming the Berkeley Group as an example. She is concerned about the impact on her constituents.
Mark Tami
Lab
Alyn and Deeside
Highlighted issues related to admin fees and management charges placed on leaseholders, arguing that these levels of charges are unacceptable. He also raised concerns about companies selling leases to financial institutions, preventing leaseholders from buying their freeholds.
Andy Carter
Lab
Warrington South
Paid tribute to the Minister for his work and requested an update on the current Competition and Markets Authority investigation which is crucial for constituents who have been calling for changes for almost 10 years.
Chris Matheson
Lab
Cardiff South and Penarth
Pressed the Minister to acknowledge that evidence suggests leasehold practices are nothing more than a financial scam from greedy speculators, even before the Competition and Markets Authority report concludes.
Kevin Hollinrake
Con
Thirsk and Malton
Advised against scrapping leasehold altogether as it could create new problems such as a £2 billion unfunded maintenance backlog, cautioning that commonhold is not necessarily the panacea for all issues.
Theresa Villiers
Con
Chipping Barnet
Acknowledged concerns about unintended consequences of the Bill on retirement housing where ground rents fund shared spaces, ensuring viability.
Lucy Powell
Lab Co-op
Manchester Central
Supports the Bill but criticises its narrow scope. Raises concerns about existing leaseholders being unaffected, lack of measures to prevent new houses from being sold as leasehold, and the need for wider reforms including commonhold, abolishing marriage value, and simplifying rights for leaseholders.
Mark Tami
Lab
Alyn and Deeside
Raises concerns about the devaluation of leasehold properties compared to freehold ones. Highlights how legal advice often pushed people into leaseholds without full awareness or choice.
Catherine West
Lab
Hornsey and Friern Barnet
Expresses concern over the escalating ground rent charges that exceed basic markers like the Retail Prices Index, making it difficult for leaseholders to sell their homes.
Desmond Swayne
Con
New Forest West
Questions whether legal advice provided to those who bought leasehold properties was adequate and ethical, suggesting potential mis-selling issues.
Julian Lewis
Con
New Forest East
Encourages Robert Jenrick's forward-looking approach on leasehold reform. Questions whether allowing additional storeys to be added to existing blocks of flats could lead to abuse and malpractice, suggesting that such changes should be revisited.
Mark Tami
Lab
Alyn and Deeside
Agrees with Julian Lewis's point about the risks associated with allowing additional storeys to be added to existing blocks of flats. Highlights that some builders in north-west England and North Wales have used leasehold properties as a way to scam more money from property buyers.
Matt Rodda
Lab
Reading Central
Questions whether the current practice of allowing additional storeys on existing blocks of flats is in the best interest of leaseholders and their neighbours. Suggests that there may be exploitation issues for both groups.
Desmond Swayne
Con
New Forest West
Does not provide a substantial argument but asks Robert Jenrick to give way, suggesting he might have additional reflections on the issue raised by Matt Rodda.
Justin Madders
Lab
Ellesmere Port and Bromborough
Mr Madders criticises the Bill for its limited scope, noting that it does not address existing problems faced by current leaseholders. He highlights the negative impact of leasehold on homeowners and the need for more substantial reforms to abolish leasehold entirely. Mr Madders raises concerns about developers passing on costs to homeowners through inflated service charges and stresses the importance of local authorities adopting communal areas properly.
Matt Rodda
Lab
Reading Central
Mr Rodda agrees with Mr Madders, emphasising the need for greater protection for first-time buyers and ordinary householders. He calls for a rebalancing of power between developers and homeowners.
Mark Tami
Lab
Alyn and Deeside
Mr Tami raises concerns about rising management fees, which he views as the next scandal. He highlights cases where residents feel they are paying their council tax twice due to additional charges.
Kevin Hollinrake
Con
Thirsk and Malton
Mr Hollinrake suggests that local authorities can require developments to meet adoptable standards, which would prevent residents from paying twice for services.
Mr Matheson agrees with Mr Madders and discusses the challenges of different developers working on the same estate, highlighting problems in ensuring adoptable standards are met across these developments.
Desmond Swayne
Con
New Forest West
Desmond Swayne argues that the retirement living industry’s business model relies on ground rents to fund capital requirements for communal areas. He believes that instead of changing the entire business model, a targeted measure addressing escalating ground rent issues would be more appropriate. He highlights a specific issue with part-sold developments where approximately 4,000 apartments will remain unsold as of April 2023. Swayne proposes a technical amendment to enable these unsold properties to continue selling with a ground rent, provided they were built when it was lawful to charge one. This would prevent legal confusion and injustice among tenants in the same development.
Matt Rodda
Lab
Reading Central
Supports points raised about leasehold reform and inequities faced by first-time buyers, lower-income individuals, and older residents. Highlights issues in Loddon Park where residents face potential unlimited costs for communal areas maintenance without caps on charges. Raises concern over inadequate information provided to first-time buyers and the imbalance between powerful developers and less informed homeowners. Also discusses problems with snagging and adoption of roads due to delays by developers. Addresses social housing enterprise, Housing Solutions, providing poor conditions next to a transport depot, resulting in noise and air pollution for residents who were not adequately informed at purchase.
Mark Tami
Lab
Alyn and Deeside
Agrees with Matt Rodda's points, emphasising that developers often lose interest in completing estates once they sell all properties. Advocates for stricter measures to ensure developers complete planned infrastructure before granting further permissions.
Matt Western
Lab
Warwick and Leamington
Supports Matt Rodda's arguments, citing similar issues in his constituency where residents face frustration from a lack of accountability among managing companies and social housing providers.
Theresa Villiers
Con
Down South
Supports legislation against abusive practices but opposes retrospective impact on existing leases. Advocates for easier enfranchisement and buyout options for leaseholders. Concerned about the impact of banning ground rents on retirement homes built before 2023 and mixed-use buildings, suggesting possible exemptions with conditions.
Kevin Hollinrake
Con
Thirsk and Malton
[INTERVENTION] Supports a cap on ground rents in complex developments at £100 or 0.1% of property value.
Matt Rodda
Lab
Reading Central
[INTERVENTION] Questions the necessity of leasehold for managing communal areas and suggests alternative systems used in other countries.
Stephen Hammond
Con
Wimbledon
Supports aim to eliminate abusive practices but raises practical concerns. Advises investigating solicitor responsibilities in leasehold transactions and worries about transferring ground rents into other charges which may be difficult to regulate. Concerned about management of large buildings under commonhold system and future building safety.
Jane Hunt
Con
Devizes
Ms Hunt supports the Bill, which aims to end unfair practices related to ground rent and service charges. She notes that many constituents have been trapped in cycles of bureaucracy and unnecessary expenses. However, she raises concerns about the impact on the retirement sector, highlighting a case where a leading developer is concerned about legal complexity and financial sustainability due to changes in the Bill's provisions. Ms Hunt suggests a modest technical change to allow for developments already part-sold to complete sales under the same lease structure.
Matt Western
Lab
Warwick and Leamington
Mr Western interjected, sharing concerns about constituents buying leasehold properties and suggesting that developers should agree to make all houses freehold and reduce transfer costs.
Kevin Hollinrake
Con
Thirsk and Malton
Supports the Bill's intent to address abuses in the leasehold system but expresses reservations about removing protections for professional landlords. Highlights the challenges of managing commonhold developments without a mechanism to enforce maintenance and insurance payments from individual residents. Cautions against complex developments becoming overly burdensome for management committees, suggesting a cap on ground rent as an alternative.
Mike Amesbury
Lab
Warrington South
Amesbury criticises the Bill for only addressing future ground rents in new leaseholds and failing to help existing leaseholders facing high and escalating ground rents, flammable flats with soaring remediation costs, and lack of transparency in service charges. He urges the Government to provide a clear timetable for broader reforms.
Desmond Swayne
Con
New Forest West
Expressed concern about the sudden withdrawal of an exemption for the retirement sector, which was previously assured. He suggested that this situation cries out for an amendment to allow more time for adaptation.
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