The leasehold reform bill, which looks to restrict ground rents on newly created long residential leases to one peppercorn per year, has passed its third reading through the House of Commons.
The bill is therefore likely to become law.
However, during the reading, an amendment that would see ground rent removed for all existing leasehold properties suffered a defeat of 306 votes to 162 on a Conservative majority.
MP Theresa Villiers (Con) questioned the amendment, asking if it “amounts effectively to a confiscation of existing property rights.”
To this, MP Mike Amesbury (Lab) said: “A feudal system of kings and barons needs to be kicked into touch. It is unjust and it is unfair.”
And MP Justin Madders (Lab), who is co-chair of the all-party parliamentary group on leasehold and commonhold reform pointed out that, “four years ago… communities secretary, Sajid Javid promised an outright ban on leasehold houses, and we all hoped that by now a law would be in place for everyone so that these wrongs could be righted.
“Those people deserve an end to this. They deserve hope that something will finally be done to make their lives a little better,” he concluded.
One counter argument, given by MP Desmond Swayne (Con), was that, “for many people in the retirement sector, it will be in their financial interest to pay a lower purchase price and have a continual ground rent, rather than to pay a significantly greater capital sum upfront.”
And Villiers spoke of the “myriad financial and legal responsibilities and keep up to speed with a rapidly changing and complex regulatory environment” that professional freeholders currently deal with, which would then be passed onto today’s leaseholders.
MP Eddie Hughes (Con) described the bill as “just the first of two-part legislation to reform the leasehold system and that further legislation will follow in this Parliament, so I encourage others… to engage with me in discussions on the second part of the legislation as it begins to form.”
He added: “We understand that many leaseholders feel trapped in a system that is not working for them, and we are determined to provide greater protection and support for all leaseholders.
“The government are committed to undertaking an ambitious and far-reaching programme of reform of the leasehold system, and I can assure the House that we are working apace to bring about those reforms.”
“The Bill represents the picking of a single apple in the orchard,” said Amesbury as the session drew to a close.
“It really is narrow in scope, a point acknowledged by the minister. It does not attack the many issues raised by members across the House that plague existing leaseholders.
“It is crazy that anyone of us here or beyond could set themselves up as a management agent and charge astronomical and unfathomable service charges. Those issues must be dealt with sooner rather than later,” he said.
Homehold chief executive Linz Darlington says: “Despite the wide support from members of the House, the government response was lacklustre. Eddie Hughes’ response was that, ‘given that we have just gone through two years of a rather unexpected global pandemic, it is best not to pin these things down too firmly’.
“Until the government commits to a timeline for wider reforms, it actually puts many leaseholders in a worse position.
“For example, if you are a leaseholder who is left in a unmortgageable and unsellable flat because of a short lease or a high ground rent, you are left in a limbo – do you pay more to resolve the issue now, or put your life on hold to wait for changes which might make it fairer in the future?
“The rejection of this Bill [amendment] by a majority of 144 votes will be very disappointing to leaseholders and those campaigning for leasehold reform.
“This was summed up by Sir Peter Bottomley, who voted with his party but stated afterwards “I am sorry that I got back in time to vote on new clause 1 – I probably voted in the wrong way and I apologise for that”.
