Ground rent

• Following the announcement of Rt Hon James Brokenshire MP of an industry pledge to address issues in the leasehold system ( Government announcement here ), Housing Communities and Local Government Committee Chair, Clive Betts MP said:
  It is disappointing that the Government has not yet taken a more vigorous approach to tackling the serious failures in the leasehold system.
• There is no inherent value to this system, which in the worst cases prevents leaseholders from renewing a mortgage or selling their home.
• The Government should accept this and ensure that ground rents are capped at an affordable rate through legislation.
• This will go some way towards alleviating the risks to leaseholders in bringing service charge, or other, challenges to tribunal.

COMMONS

Flawed system leaves leaseholders at risk of exploitation by developers, freeholders and managing agents – urgent reform needed

Key elements of current leasehold system open to abuse

• The report finds key elements of the current leasehold system are open to abuse and without defined purpose.
• Other aspects, such as processes for invoicing service charges and renewing leasehold must be made simpler, demonstrate value for money and provide greater transparency to leaseholders.

The Committee has concluded that:

Chair's comments

• Financially, the buck always seems to stop with the leaseholders and there is little they can do about it.There are some practices that should stop outright.
• In other areas, such as ground rents, service charges and dispute mechanisms, the Government needs to tip the balance back towards leaseholders.
• There is little evidence that professional freeholders provide a better level of service than can be provided by leaseholders themselves.

Main findings and recommendations:

Ground rent

Permission fees

Costs of maintenance

Protecting buyers at point of sale

Dispute resolution

Enfranchisement

Further information

COMMONS

Flawed system leaves leaseholders at risk of exploitation by developers, freeholders and managing agents – urgent reform needed

Key elements of current leasehold system open to abuse

• The report finds key elements of the current leasehold system are open to abuse and without defined purpose.
• Other aspects, such as processes for invoicing service charges and renewing leasehold must be made simpler, demonstrate value for money and provide greater transparency to leaseholders.

The Committee has concluded that:

Chair's comments

• Financially, the buck always seems to stop with the leaseholders and there is little they can do about it.There are some practices that should stop outright.
• In other areas, such as ground rents, service charges and dispute mechanisms, the Government needs to tip the balance back towards leaseholders.
• There is little evidence that professional freeholders provide a better level of service than can be provided by leaseholders themselves.

Main findings and recommendations:

Ground rent

Permission fees

Costs of maintenance

Protecting buyers at point of sale

Dispute resolution

Enfranchisement

Further information

• The Housing, Communities and Local Government Committee hold the final session of their inquiry into leasehold reform on Monday 4 February when they take evidence from Heather Wheeler MP, Minister for Housing and Homelessness.
• The session will investigate the Governments position on a range of issues highlighted over the course of the inquiry.
• This will include concerns around onerous ground rents and service charges, as well as accusations of mis-selling.
• It will also look at potential for reform, including wider adoption of the commonhold model of ownership and improved dispute mechanisms.