Ground Rent – Leasehold Property Bill
26 June, 2019
Eddie Hughes, Conservative MP for Walsall North put forward a Private Members Bill in the House of Commons this week (Tuesday 25th June) proposing the creation of a legal obligation for freeholders to grant a Deed of Variation to leaseholders where their ground rent prohibits the sale or mortgage of their property.
He proposed that ground rent be capped at 0.1% of the property value or £250 whichever is the lower and also hopes that the original developers of the property can be made liable for the legal fees incurred in preparing the Deed. The Bill was passed in a House that could not be described as busy and will receive a second reading this week.
Mr Hughes’ Bill comes on the back of recent reports and proposals, including the Law Commission proposals on leasehold which may take some time to make it to the statute books, whether in the form proposed or otherwise. This Bill puts forward what seems to be a sensible, easy and cheap resolution and it will be interesting to see whether it makes it further.
In the meantime leaseholders should not forget that they have the ability to reduce their ground rent to a peppercorn by extending their lease or in the case of houses, buying the freehold.