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Leasehold reform proposals being pushed forward by Housing Secretary Michael Gove could become law today.
There is now a rush to get the bill passed because Friday is the last day for lawmakers to attend parliament before the election.
The Leasehold and Freehold Reform Bill promises to abolish leasehold on new homes, but not on new-build apartments, which account for 70% of leasehold properties. The Bill is still at the House of Lords committee stage and was thought unlikely to survive the final round of negotiations as Lords work out the details.
but, The Tenancy Reform Bill is due to be debated in the House of Lords on Friday.Labour sources have indicated they would like to see the bill strengthened but are prepared to support it as is.
Conservative councillors have been threatening rebellion in recent months over the Government’s leasehold and freehold proposals.
Earlier this month, more than 30 Conservative MPs wrote to Chancellor Jeremy Hunt expressing their unhappiness with the current leasehold system and urging the government to abolish ground rent on leasehold properties.
Currently, there is no cap on the amount of “ground rent” that a freeholder can charge to an existing tenant.
It has been widely reported recently that the annual rate charged to renters will be capped at £250, rather than being reduced to zero, or a “peppercorn” rate, as first outlined in the Conservative Party’s 2019 manifesto.
Mr Gove, who last year called leasehold a “feudal institution that must be abolished”, has faced opposition from the Treasury over his plans because insurance funds have heavily invested in their ground rent portfolios and internal Treasury analysis suggests up to £37 billion of investment could disappear, potentially leading to compensation claims against the government.
According to Department for Equalisation, Housing and Communities data published last May, there are nearly five million leasehold homes in England, or 20% of England’s housing stock, so it’s no surprise that abolishing leasehold would be a popular policy among potential voters.
Former Housing Secretary Robert Jenrick is among those who want leasehold to be abolished altogether.
“This is an affront to the Conservative dream of home ownership, it’s unfair and it’s just not right,” he said.
Harry Scoffin, founder of campaign group Free Leaseholders, said earlier this month that “every Conservative MP elected in 2019 had a manifesto which made the party committed to capping ground rents to a negligible amount – zero monetary value.”
“The Conservative Party has a clear choice: will they side with young homeowners and first-time homebuyers, or will they side with rentiers, racketeers and middlemen? Rishi Sunak must keep a cool head and stand up for the vulnerable.”
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