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Leasehold reform bill one step closer to passing but key amendment defeated

  • 25/01/2022
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Leasehold reform bill one step closer to passing but key amendment defeated
The leasehold reform bill, otherwise known as the ground rent bill, has passed its third reading in the House of Commons and is close to being passed into law, although certain amendments have failed to be added.

The third reading, which occurred yesterday, means that the only stages left before the bill comes into law are consideration of amendments and royal assent, when it is passed into law.

The bill aims to limit ground rents on long residential leases so leaseholders are not stuck with high bills.

Although the bill passed its third reading, an amendment which would have seen ground rent removed for all existing properties, was defeated by 306 votes to 162. The majority of those opposing were Conservative.

The amendment was tabled by Mike Amesbury, shadow minister for Housing, Communities and Local Government, who said the new clause would require the government to produce draft legislation within 30 days to reduce ground rent to a peppercorn rent in existing long residential leases.

The bill currently only accounts for newly established leases, not existing leaseholders.

In the debate, Amesbury said: “The antiquated feudal system of leasehold is unjust for the many and not just the new. People in England and Wales have been trapped in that relic from the past for far too long.”

However, Theresa Villiers, Conservative MP for Chipping Barnet, said the amendments could effectively amount to a confiscation of existing property rights.

She said: “That in itself has fairness issues, but it also deters future investment in our building stock. That future investment is needed, for example, if we are going to insulate against climate change and turn our buildings into more carbon neutral ones for the future.”

Jim Shannon, DUP MP for Stanford, added that leaseholders with high or escalating ground rents could struggle to remortgage or sell their house, which would leave them in “greater financial distress”.

He said it was a “substantial problem” with the current bill which it did not help existing leaseholders with “high and escalating ground rents”.

Amesbury, Labour MP for Weather Vale, said the new clause would help 4.5 million people “trapped in the feudal system”, with 1.4 million of them in houses, many in the North, North West and Wales.

He added that the bill will not “force accountability on freeholders or managers for their actions” and it would not cover historical building safety costs, cost or difficulty in obtaining enfranchisement, unfair contract terms or other issues faced by homeowners locked in leaseholds.

Amesbury said: “The unfairness and injustice must be gone for good. The government need to take further action. Leasehold is a system hundreds of years old. A 28-page bill is not enough to finish it off—and we need to finish it off.

He added: “The bill is a good attempt at preventing future wrongs, but with so many real existing wrongs in front of us it is easy to see why leaseholders sitting in properties today will feel short-changed when new neighbours literally across the road will be freed from the problems that are still impacting them—a real injustice.”

He continued that he was “partially pleased” that as part of the debate, the government had published consultation on wider leasehold reform, but said so far it had “real and fundamental change” and the government would have to do more.

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