Closed petition Legislate to BAN leasehold houses & set ground rents of new-build flats to ZERO
Suffering leaseholders have endured endless consultations & years of failed reforms. Government must fulfil the promises made in 2017 to legislate to:
1. BAN leasehold houses
2. Restrict all ground rents on new leases to ZERO
3. Enact ALL of the Law Commission proposals
More details
The evidence is clear, Leasehold law is flawed. Failure to enact the Law Commission’s recommendations and banning leasehold houses & setting future ground rents to ZERO is a failure to fix the broken housing market
The Law Commission proposals are about “making our homes ours, rather than someone else’s assets” Prof Nick Hopkins, Law Commissioner
“Justice delayed is Justice denied” (Robert Jenrick, July 2020)
GOVERNMENT MUST FULFIL THEIR PROMISE
Leaseholders deserve more than empty promises
This petition is closed All petitions run for 6 months
Government responded
This response was given on 28 October 2020
The Government has confirmed it will ban the sale of new leasehold houses and restrict grounds rents to zero for future leases. We will bring forward legislation as soon as parliamentary time allows.
Read the response in full
The Government is committed to promoting fairness and transparency for homeowners and ensuring that consumers are protected from abuse and poor service. As part of this, we are taking forward a comprehensive programme of reform to end unfair practices in the leasehold market. This includes measures to ban the sale of new leasehold houses, restrict ground rents to zero for future leases, give freehold homeowners equivalent rights to challenge unfair charges, and close loopholes to prevent unfair evictions.
Given the impact of Covid-19 on the legislative agenda, and the Government’s wider priorities to restart the economy, we will bring forward leasehold legislation as soon as parliamentary time allows. However, it is worth noting that in advance of legislation the numbers of new-build leasehold houses coming onto the market has already significantly decreased: 1% of new build houses were registered as leasehold in the last three months of 2019, compared to 17% in the first three months of 2017.
As part of our reform programme, we are working with the Law Commission - an independent body which keeps the law of England and Wales under review – on a number of important areas. This includes:
- Enfranchisement: to make buying a freehold or extending a lease easier, quicker and cheaper;
- Commonhold: to remove barriers to and reinvigorate Commonhold so that consumers have a choice of tenure; and
- Right to Manage: to ensure that the law works effectively so that residents in blocks are more easily empowered to take on the management of their properties, if they wish to do so.
In January this year, the Law Commission published the first of four reports, on the valuation aspects of enfranchisement, and on 21 July the Law Commission published a further three reports on the remaining aspects of enfranchisement as well as Commonhold and Right to Manage. Details can be found here: https://www.lawcom.gov.uk/project/residential-leasehold-and-commonhold/. The Government has welcomed the Law Commission’s reports. We will consider all their recommendations carefully and respond in due course.
Finally, the Government asked the Competition and Markets Authority (CMA) to investigate potential mis-selling of homes and unfair terms in the leasehold sector. The CMA published an update in February this year which identified concerns, including high and increasing ground rents, sales practices, and use of permission fees and charges. On 4 September, the CMA announced that it was opening enforcement action focussing on certain practices of four housebuilders. The Government has welcomed the steps being taken to tackle potential mis-selling and unfair terms in the leasehold sector and wants to see homeowners who have been affected obtain the justice and redress they deserve.
The CMA has now written to the companies concerned outlining its concerns and requiring information. How the case proceeds will depend on the CMA’s assessment of the evidence. Possible outcomes include legal commitments from the companies to change the way they do business, or if necessary, the CMA could take firms to court. The Government is keeping a close eye on this issue and will consider any next steps once the CMA has progressed its enforcement action.
Ministry of Housing, Communities and Local Government
Related activity
Government announces plans to end ground rents for new leasehold properties
As part of the Queen's Speech on Tuesday 11th May, the Government announced that it plans to introduce new laws to effectively abolish, with limited exemptions, the practice of charging ground rent for new leasehold properties in the UK.
Freeholders that continue to charge ground rent in contravention of the Bill, if it is passed, would face fines.
The Government intends to introduce a new Bill into Parliament to make this change - the Leasehold Reform (Ground Rent) Bill. This Bill will be published in due course.
Read the Queen's Speech background briefing notes for more information on the Government's proposed Bill:
https://www.gov.uk/government/publications/queens-speech-2021-background-briefing-notes
What is the Queen's Speech?
The Queen's Speech is the speech that the Queen reads out in the House of Lords Chamber on the occasion of the State Opening of Parliament.
It's written by the Government and sets out the programme of Bills - new laws, and changes to existing laws - that the Government intends to put forward in this new Parliamentary session. A session of Parliament usually lasts around one year.
Once the Government puts forward a Bill in Parliament, Parliament then debates the Government's proposal and decides whether to adopt the changes to the law set out in the Bill.
MPs debate legislation to reform the leasehold system
On Monday 29 November, MPs debated the Government's Leasehold Reform (Ground Rent) Bill 2021-22. The Bill restrict ground rents on newly created long residential leases.
Watch the debate here: https://parliamentlive.tv/event/index/1826e88c-22d7-4df2-a5a7-03f3c09ac536?in=17:01:33
Read the transcript of the debate here: https://hansard.parliament.uk/commons/2021-11-29/debates/6ADDA17B-33E3-47D8-B984-4FF9A731D5A3/LeaseholdReform(GroundRent)Bill(Lords)
This was a second reading debate, which is first opportunity for MPs to debate the main principles of a bill.
What happens at second reading?
The Government minister, spokesperson or MP responsible for the bill opens the second reading debate. They usually begin by responding with their views on the bill. The debate then continues with other Opposition parties and backbench MPs giving their opinions.
At the end of the debate, the Commons decides whether the bill should be given its second reading, meaning it can proceed to the next stage. If there isn't consensus that a bill should proceed to its next stage, MPs will vote on this.
Find out more about how second readings work: https://www.parliament.uk/about/how/laws/passage-bill/commons/coms-commons-second-reading/
What happens next?
The bill has now been sent to a Public Bill Committee, where MPs will scrutinise the bill line by line. They are expected to report to the House by Thursday 9 December.
You can read the Bill in full, and keep up to date with its progress, here: https://bills.parliament.uk/bills/2864
Find out more about the Bill
The House of Commons Library has produced a briefing paper outlining the main provisions of the Leasehold Reform (Ground Rent) Bill 2021-22 and the key issues raised during consideration in the House of Lords: https://commonslibrary.parliament.uk/research-briefings/cbp-9236/
Further information
You can sign up to the UK Parliament newsletter for the latest information on how to get involved and make a difference: https://learning.parliament.uk/en/your-uk-parliament-newsletter-sign-up-form/
Reforms to ground rent for new leasehold properties made into law
On 8 February, the Leasehold Reform (Ground Rent) Bill received Royal Assent, and is now an Act of Parliament.
The Act will prevent freeholders in England and Wales charging more than a 'peppercorn' ground rent for most new residential leaseholds, effectively abolishing ground rents on new leaseholds.
Find out more about the Act, and the changes made to it as it was considered by Parliament: https://commonslibrary.parliament.uk/research-briefings/cbp-9236/
Find all documents relating to the Bill's passage through Parliament: https://bills.parliament.uk/bills/2864
What is Royal Assent?
Once a Bill has completed all its parliamentary stages in both Houses, it is ready to receive Royal Assent. This is when the Queen formally agrees to make the Bill into an Act of Parliament (law). While the Monarch has the right to refuse Royal Assent, nowadays this does not happen, and Royal Assent is regarded as a formality.
Find out more about the stages a Bill must go through in order to become law: https://www.parliament.uk/about/how/laws/passage-bill/
Get involved in the work of the UK Parliament
Sign up to the UK Parliament newsletter for the latest information on how to get involved and make a difference: https://learning.parliament.uk/en/your-uk-parliament-newsletter-sign-up-form/