Tory rebels demand changes to Leasehold Bill

Tory rebels demand changes to Leasehold Bill

0:01 AM, 3rd May 2024, About 8 months ago

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Backbench Tory MPs are threatening to rebel against the government’s leasehold reform bill.

More than 30 MPs including the former Housing Minister Robert Jenrick want to see the leasehold system scrapped altogether.

In a letter to the Chancellor seen by Sky News, Conservative backbenchers urged the government to scrap ground rent on leasehold properties.

End feudal leasehold system

Under current rules, there is no cap on the amount freeholders can charge existing leaseholders for ground rent.

Housing Secretary Michael Gove promised to end the “feudal leasehold system” with a peppercorn system, where ground rent is as close to zero as possible.

However, Mr Gove was forced to ‘water down’ these reforms in the Bill after he faced opposition from the Treasury over ground rents.

According to a report in The Times, numerous pension and insurance funds have made substantial investments in ground-rent portfolios.

An internal Treasury analysis indicates that as much as £37 billion in investments could be wiped out, which may lead to compensation claims aimed at the government.

According to various reports, the Leasehold Bill will now propose capping annual charges for leaseholders at £250 instead of eliminating them entirely as promised in the 2019 Conservative manifesto.

Rishi Sunak must hold his nerve

Many MPs including Robert Jenrick wrote to the Chancellor urging him to reform the leasehold system.

They wrote: “It’s time to finish what Margaret Thatcher started and implement peppercorn ground rents and other much needed reforms to leasehold.”

MPs also highlighted the financial strain on constituents due to leasehold costs and called for crucial reforms to uphold Tory aspirations of creating a “property owning democracy.”

Harry Scoffin, founder of the campaign group Free Leaseholders, told Sky News: “Every single Conservative MP elected in 2019 stood on a manifesto committing their party to restricting ground rents to a peppercorn, or zero financial value.

“The Conservative Party has a clear choice: it is on the side of young homeowners and aspiring first-time buyers, or rent-seekers, extortionists and middlemen? Rishi Sunak must hold his nerve and stand up for the little guy.”


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