Communities Secretary pays tribute to Sir Peter and ‘campaigners’ for fighting ‘rip-off practices in the leasehold sector’
By Harry Scoffin
APPG co-chair Sir Peter Bottomley pressed Communities Secretary Robert Jenrick over long-awaited leasehold reforms last week.
Speaking via video link on May 13, the veteran Conservative MP used news of plans to “safely” reopen the housing market to remind Mr Jenrick of peppercorn ground rents and a ban on leasehold houses.
“The Secretary of State is right to talk about people living their lives. Most of the people going to new homes will be going to leasehold ones,” said the Father of the House.
The Worthing West MP continued:
“When will he, and we, act to ban the sale of leasehold and pre-sold houses? When can he announce actions for justice for leaseholders and lease renters who are stuck with excessive ground rents?”
Sir Peter suggested that wealth eroding leasehold games would not be tolerated in the post-coronavirus economy, and plugged LKP and its parliamentary wing:
“Can he advise residential landlords [freeholders] and smart developers that the financial games are over, and that the Leasehold Knowledge Partnership and the all-party group on leasehold and commonhold reform are going to make sure that there is justice for leaseholders?”
It comes as new housing minister Lord Greenhalgh told MPs that unscrupulous freeholders – including those hiding their beneficial ownership behind shell companies and nominee directors – should be made “pariahs” after the pandemic.
Paying tribute to the work of Sir Peter and other “campaigners”, Mr Jenrick was able to reveal that the “draft legislation” will be with MPs for scrutiny “shortly”.
This could be as early as before the summer recess.
The Communities Secretary explained that the government is opposed to “rip-off practices in the leasehold sector” which, he said, “in general … have reduced enormously as a result of the government’s firm stance and that of campaigners, including many members across the House. I want to see that continue.”
LKP understands he is referring to a steep fall in the number of new-build houses being sold as leasehold.
“The proportion has fallen substantially: from 16% in March 2017 to 1% in June 2019. The 2017 Government’s stated intention to legislate against this practice may have had an impact on this,” said the Commons Library in a recent briefing paper to MPs.
Mr Jenrick’s hard hitting leasehold rip-offs rhetoric echoes the language of James Brokenshire and Sajid Javid, his predecessors who railed against “the ground rent gravy train” and “leases that put corporate profit over consumer protection”.
Mr Jenrick is the latest in a line of Conservative ministers committed “to legislating to bring ground rents down to a peppercorn [zero financial value], and to ensuring that no new homes are built as leasehold properties except in the most exceptional of circumstances.”
The measures were first announced by Sajid Javid in December 2017, as part of his crusade to “liberate” consumers from “feudal practices” in the leasehold market.
Mr Javid’s replacement James Brokenshire reconfirmed the policies in June 2019, after a heavily publicised consultation that attracted over 1,200 responses.
LKP has repeatedly called for an end to the trade in freehold titles, with zero ground rents stopping future homes from being hoovered up by investors.
Deprived of the ability to sell on ground rents, developers would be left to hawk heavily discounted freeholds for the more dubious incomes, risking their reputations.
Removing the main financial incentive to sell flats as vulnerable tenancies paves the way for a new-and-improved commonhold.
The peppercorn rents policy also featured in the 2019 manifesto of Boris Johnson’s Conservatives. It has support from Labour, who included it in their most recent programme for government, and the Liberal Democrats.
Related posts:
Bob Blackman gets Theresa May to commit to ‘peppercorn’ ground rents … Let’s hope she knows what it means
‘Peppercorn’ ground rents on Help To Buy properties … from next year
Bottomley tells Taylor Wimpey to explain ‘sharp practice’ ground rents – and asks for names of directors who approved them
Housebuilders shares crash over ground rents, with McCarthy and Stone down 10%
New LEASE chair declines to endorse peppercorn ground rents on BBC
RMG’s unexplained blunder increased pensioners’ ground rents by 59%, saying it was ‘in line with RPI’
Thank you Sir Peter Bottomley and the APPG for the work you are doing on the Leasehold problem. We bought a house from Taylor Wimpey in 2015 with the idea of owning it and buying the Freehold but were told by Plumlife we must first own the property. We are in our 80’s and have no way of raising the money to do that, we own 50%. We don’t mind paying the rent but we would like to have the Freehold to pass on to our kids. It would be great news if we could do that. Sincere thanks to you all . John and Edie Fodden
We too are in our 80s but are trying to decide whether to buy our freehold from Redrow, costing 26 times the £300 Ground Rent, with a decision to be made by the end of July. It is our 60th Wedding Anniversary today, so do we buy or wait?
When we we “bought ” our home in 2015 we were under the impression the ground rent was a compulsory historical levy. Now we realise it is pure greed.
I do hope we get clarification what the legislation will actually do for us before Redrow decide to sell on to an offshore tax haven.
Barry and Glenda Richardson
Still beg the question, what will the government do about existing leaseholders caught in this trap.
Will we be able to buy our Freehold at the original cost, before the developer sold it on to a third party investor?
If so, will there be a set rule from government to allow us to this without inflated solicitors cost, to cover Freeholders fees, also to do away with tribunals to safeguard present leaseholders?
As a leaseholder for ten years, I want to say that my mental health has been effected and I worry about my situation constantly,
Abolish this Feudal System for good – Peppercorn Rents or zero ground rent would be the way to resolve this money making scheme for landlords who have no other purpose then this.
Mrs A Doran
Angela…
I refer to current HOUSE leaseholders only.
It seems to me that a ‘peppercorn’ rent will be most welcome but it still leaves the freeholder with his piece of paper which says HE owns YOUR property which YOU paid for, and you can be sure that if there is any means whereby they can extract some cash…they will.
It seems that commonhold is the alternative solution for leasehold woes, I would like to know what will happen if commonhold is accepted, will it be that leaseholders have to bargain with freeholders to get their commonhold and if there is a dispute will that mean reverting to tribunals again?
It seems that the legal fraternity have made a mistake in thinking that freeholder companies have ‘human rights’ , each individual in a company has his own human rights, but to say that someone who owns many freeholds and operates within a company for the benefit of that company is a totaly different situation from the lone houseowner/leaseholder who acts for himself for his own human situation, not a company situation. These legal eagles have bamboozled themselves.
I understand that legislation is coming to make freeholders give a more transparent account of their business dealings and a ‘responsible manager’ will be appointed, why?
why can’t the actual freeholder be named? it is a peculiar sort of transparency when the legal owner of my property which I paid for is protected by law from having to give his name…why? this is not transparency! it is obsfucation.
Thanks again Angela..you are right in saying “this money making scheme for landlords who have no other purpose then this.”
About time but let’s hope he actually does it! I also hope that long lease apartments will not be forgotten amid the news homes scandal’. For our part we demand:-
10x ground rent as the formula for enfranchisement Valuation
Both parties responsible for own legal fees and appeals to be restricted.
The totality of whatever was registered at Land Registry to be included in enfranchisement (no hiving off of bits of an estate)
Co-operative company structure as the means of managing the process to ensure a more democratic and participatory alternative to a Company limited by guarantee.
Thankyou so much for working on this issue to rectify what is clearly unjust. I currently have a leasehold property and I pray that this is overturned for myself and others caught in this trap.
The Repairs and Maintenance and Major Works Contribution reforms to Leasehold Laws as they apply to Council Landlords and Tenants are still being skated over in the press. Council Leasehold Tenants are afraid to make waves in the Press and too often are unable to pay for necessary legal aid. Their insurers use Council privileges embedded in the Law as a reason for not providing 100% insured support to tenants trying to fight back against rights abuses and consequently unreasonable service charges.
We are looking to buy the freehold of a detached house is this the best option at present
Gordon….
I have been waiting for government to address leasehold reform and produce legislation for 20 or so years, I would have bought my freehold years ago but because there was or still is no regulation as to what freeholders could charge or what legal wrangling they could use and because governments over these past years have not seen fit to make legislation to curb the unscrupulous methods that ‘some’ freeholders have enjoyed….. it has been a VERY long wait.
During this 20 yr period I have paid ground rent which has been for the sole purpose of enriching scoundrels who do nothing for the payment nor do they take any responsibility for anything related to the leasehold, or the property …. apart from taking the money.
It seems to me that there are some very powerful people who have made fortunes from this leasehold racket, they have even managed to infiltrate the governments LEASE advice department so that instead of LEASE being a support for leaseholders, it became a centre for freeholders to teach their fellows in legalised crime how to extract as much money as possible from leaseholders. This is an absolute fact as our true friends LKP have brought to light.
Is it any wonder that ordinary people are terrified of dealing with freeholders! … you just do not know what will happen… you can be sure it will cost you…don’t disturb the hornets nest!
Over many years it seems to me that governments have colluded with landlords/freeholders possibly with the intention of grabbing some tax … I don’t know
but it does seem peculiar that Scotland could just rid itself of the leasehold system without all the parafinallia that our government has undertaken…. no-one seems to know WHY!
Gordon….as to your question… I don’t know if our LKP friends read these notes or have time to answer your question… my own opinion is that it would be best to wait. Legislation is about to come out sometime in the next couple of months I believe and it could be a complete game changer. Perhaps someone of the LKP team could advise.
Again I must congratulate our LKP friends for their knowledge and hard work, I would also include eminent politicians foremost of which is Sir Peter Bottomley and others mentioned on this website.
…Bob…
Please keep me posted.With this fantastic news.Its about time. What a rip off its been .A lot of money has been made by these companies !!
For Elaine Milford..
you say … “For our part we demand:-
10x ground rent as the formula for enfranchisement Valuation
Both parties responsible for own legal fees and appeals to be restricted…”
To be honest that is not the answer… for a start leasehold properties are now banned on new builds unless there is some special need… so present leaseholders are now being discriminated against. … my demand is a ban on present leaseholds in the same manner.
Secondly leaseholders who have paid ground rents for any length of time should be given their money back as the system has been shown to be ‘unfair’ as our Prime Minister said so..
Thirdly… there should be NO payment to purchase the freehold, this was an unnecessary system set up in order to enrich those who’s only interest is to take money from ordinary working people who were not shown that the leasehold system is legalised crime.
There should be NO disputes with freeholders, freeholders rights to ‘own’ YOUR HOUSE that YOU PAID FOR should be taken away.. they should no start bleating about their human rights
… they work for companies.. a company is a company..NOT a lone human being as a home owner/leaseholder.
…Bob…
In a previous post I mentioned that Freeholders had a ‘piece of paper’ which says they own your property….viz.
‘It seems to me that a ‘peppercorn’ rent will be most welcome but it still leaves the freeholder with his piece of paper which says HE owns YOUR property which YOU paid for, and you can be sure that if there is any means whereby they can extract some cash…they will. ‘
I am hoping in the coming month..July 2020.. that the ‘piece of paper’ will be used as the PM Chamberlain is said to have used the ‘piece of paper signed by Her Hitler’ as a substitute for San Izal …!