Commons Sense

Hansard-based summaries and metrics

<-- Back to proposed bills

Leasehold Reform (Ground Rent) Bill [Lords] - Sitting 3

09 December 2021

Proposing MP
Mike Amesbury Lab
Weaver Vale
Type
Public Bill Committee

At a Glance

Issue Summary

The statement discusses an amendment to ensure equal rights for leaseholders of retirement properties under the Leasehold Reform (Ground Rent) Bill. Mike Amesbury is proposing a new clause to restrict ground rents on existing long residential leases. The statement addresses the limitations of the Leasehold Reform Bill in addressing ground rent issues and other leaseholder concerns. The statement discusses amendments to the Leasehold Reform Bill [Lords], specifically addressing ground rent issues for existing leaseholders. The statement addresses concerns about the impact of reducing new ground rents on other leasehold costs, such as service charges and additional fees. The statement addresses concerns about service charges being used as a disguised form of ground rent under the Leasehold Reform Bill.

Action Requested

The MP requests clarification on why retirement properties have a longer transition period and seeks to know if there is a specific date by which the provisions will come into force. The Minister explains that the Government has decided to give developers additional time to prepare for changes, but believes in striking a balance between protecting consumers and providing fair adjustment periods.

Key Facts

  • Amendment 10 aims to remove subsection (4) of clause 26.
  • The Bill will prevent provisions from coming into force for retirement properties before April 2023.
  • 50,000 leaseholders of retirement properties may be affected by the transition period.
  • Government announced in January 2021 that retirement property exemption would no longer apply.
  • Developers incur additional costs due to communal spaces characteristic of retirement developments.
  • The new clause aims to ensure further legislation is introduced to remove ground rents from all leaseholders, not just newly established ones.
  • Draft legislation must be published within 30 days of the Act coming into force.
  • The statement is part of the Committee's discussion on the Leasehold Reform Bill [Lords].
  • New clause 1 aims to make all leaseholders equal in terms of ground rents.
  • Tracy Whittle and Steve Wills are mentioned as examples of individuals affected by spiralling ground rents.
  • New clause 1 would require the Government to produce draft legislation within 30 days to restrict ground rents on existing residential leases.
  • The Competition and Markets Authority (CMA) has secured settlements with two leading housing developers and an investor in the leasehold sector, benefiting thousands of existing leaseholders.
  • The Government announced reforms to the valuation process for calculating premiums for extending a lease or buying the freehold, including abolishing marriage value.
  • New Clause 3 requires the publication of a report on the impact of reducing new ground rents within two years of Royal Assent.
  • Ground rents are being replaced by other charges such as parking space fees.
  • The Leasehold Knowledge Partnership provides examples of emerging leaseholder costs.
  • New clause 3 addresses concerns about service charges being used to charge ground rent by another name.
  • Landlords face a maximum penalty of £30,000 per lease if they charge prohibited rent.
  • An impact assessment during a period of wider reform would be questionable due to simultaneous changes.
▸ Assessment & feedback
Summary accuracy