(Alliance News) - A proposal to effectively abolish ground rents for most new long residential leaseholds in the UK is on the verge of becoming law having passed through both houses of Parliament.
Communities Minister Eddie Hughes said the change is part of a wider UK government commitment to undertake an "ambitious and far reaching programme of reform to the leasehold system".
The Leasehold Reform (Ground Rent) Bill will restrict ground rents on most newly-created long residential leases in England and Wales to a token one peppercorn per year, which effectively restricts them to zero financial value.
Hughes said the change will "make a real difference to thousands of future leaseholders".
He said: "The bill delivers an important improvement to the leasehold system for future generations of homeowners. It's a vital step towards addressing the historic imbalance in the leasehold system, and it is integral to the government's broader reform to create a housing market that works for everyone."
The minister conceded the bill is "narrowly focused", but said the government is "working at pace" to bring other reforms forward.
He said: "We understand that many leaseholders feel trapped in a system that isn't working for them and we are determined to provide greater protection and support for all leaseholders."
Labour shadow communities minister Mike Amesbury said: "It's a good attempt at preventing future wrongs, but with so many real existing wrongs in front of us it is easy to see why leaseholders sitting in properties today will feel short-changed when new neighbours literally just across the road will be freed from the problems still impacting them. A real injustice."
"The bill represents the picking of a single apple in the orchard", he said adding, "leasehold is a system hundreds of years old. A 28-page bill is not enough to finish it off, and we do need to finish it off."
He called for a "clear timetable" for further changes, and said: "The government will have to do more, and do it quickly than in due course".
At the bill's report stage, a Labour amendment to remove ground rent for all existing leasehold properties, as well as new ones, was defeated by 306 votes to 162.
Father of the House, Conservative MP Peter Bottomley welcomed the changes introduced by the bill "which I wish had been taken many, many years ago", he said.
But Conservative former minister Theresa Villiers said: "Yes of course we need to crack down on the unscrupulous activities of morally suspect developers abusing the ground rent system, but I do fear that the approach in this Bill is too blunt an instrument.
"We would be better off with regulation of professional freeholders, not de facto abolition of professional freeholders."
By Ben Hatton, PA Political Staff
source: PA
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