Ground rents will be capped at £250 a year for leaseholders in England and Wales, the government has announced. Announcing the cap in a TikTok video, Prime Minister Sir Keir Starmer said: “I’ve spoken to so many people who say this will make a difference to them worth hundreds of pounds.”The reforms will be published in the draft Leasehold and Commonhold Reform Bill, which will be introduced on Tuesday.Ground rents – an annual fee leaseholders must pay to their freeholder – were abolished for most new residential leasehold properties in England and Wales in 2022, but remained for existing leasehold homes.Labour’s 2024 election manifesto promised to “tackle unregulated and unaffordable ground rent charges”.It is common for a lease to include a clause that the ground rent doubles or increases by RPI inflation at fixed intervals, which can make it difficult to sell or get a mortgage for a property.The Labour government says under its reforms, ground rent will ultimately be reduced to a peppercorn, effectively zero, after 40 years.New leasehold flats will be banned and forfeiture, whereby leaseholders can lose their home and the equity they built up if they default on a debt as low as £350, will be abolished.The bill will also make it easier for existing leaseholders to convert to commonhold, which means occupants jointly own the ground a flat is built on as well as the building, without an expiring lease.There are around five million leasehold homes in England and Wales, where people own the …
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[mwai_chat context=”Let’s have a discussion about this article:nnGround rents will be capped at £250 a year for leaseholders in England and Wales, the government has announced. Announcing the cap in a TikTok video, Prime Minister Sir Keir Starmer said: “I’ve spoken to so many people who say this will make a difference to them worth hundreds of pounds.”The reforms will be published in the draft Leasehold and Commonhold Reform Bill, which will be introduced on Tuesday.Ground rents – an annual fee leaseholders must pay to their freeholder – were abolished for most new residential leasehold properties in England and Wales in 2022, but remained for existing leasehold homes.Labour’s 2024 election manifesto promised to “tackle unregulated and unaffordable ground rent charges”.It is common for a lease to include a clause that the ground rent doubles or increases by RPI inflation at fixed intervals, which can make it difficult to sell or get a mortgage for a property.The Labour government says under its reforms, ground rent will ultimately be reduced to a peppercorn, effectively zero, after 40 years.New leasehold flats will be banned and forfeiture, whereby leaseholders can lose their home and the equity they built up if they default on a debt as low as £350, will be abolished.The bill will also make it easier for existing leaseholders to convert to commonhold, which means occupants jointly own the ground a flat is built on as well as the building, without an expiring lease.There are around five million leasehold homes in England and Wales, where people own the …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
