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Consultation On Capping Ground Rent By Gov.Uk

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Mr Michael Gove ,  Housing Secretary  is  holding a consultation on capping ground rent  for existing leaseholders ( published on 9 Nov 2023  and closing on 23 Dec 2023 ).

 

Ground rent reforms to save thousands for leaseholders - GOV.UK (www.gov.uk)

 

The options are :

1.  setting ground rent  at a peppercorn

2.  putting in  place a max value .

3.  capping ground rent at a percentage of property value.

4.  limiting ground rent to original value  when lease was granted .

5.  freezing ground rents at current  levels.

 

Leaseholders should  post  their  selection   (  for  option 1  )  to Mr Gove    before  15  Dec 2023 .

 

Other  options   means   paying   ground rent etc   .

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To beat the postmans strike  starting 14 Dec,  its better to post your  selection   for option 1  about  10 days earlier by second class  stamp  costing 75 p  to Mr Gove   at Ministry of Levelling Up , Housing and Communities.   SW1P 4DF . 

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I   found this  report  about capping  the ground rent  on the LKP  website  :

 

https://www.leaseholdknowledge.com/leasehold-reforms-respond-to-government-consultation-over-ground-rents-before-21-december-because-those-legging-you-over-will-certainly-be-doing-so/

 

Send your choice for option 1  to Mr Gove   and send  before  4 Dec   or   those-legging-you-over-will-certainly-be-doing-so/

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This is only a consultation, of course. There is no Bill before Parliament likely to proceed as yet, and the proposals focus only on 'escalating ground rent' clauses that set-out a scheme for increases every X yrs. (e.g. it increases by Y % each time).

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Copied from  https://www.gov.uk/government /consultations/modern-leasehold-restricting -ground-rent-for- leases

 

This consultation seeks views on limiting the level of ground rent that leasesholders can be required to pay in England and Wales. It asks for views on the the following:

  • the full range of problems that existing ground rents can cause for leaseholders, and the scale of these problems
  • which option to cap ground rents respondents believe is the right one to deliver our aim of giving leaseholders a fairer deal
  • whether there should be a period of delay before implementing any cap, and
  • the types of leases which need to be exempted from any cap to ground rents

How to respond:

You may respond by completing an online survey at Citizen Space.

Alternatively you can email your response to the questions in this consultation to Groundrents.Consultation@levellingup.gov.uk

If you are responding in writing, please make it clear which questions you are responding to.

Written responses should be sent to:

Ground Rent Consultation
3 SW, Fry Building
2 Marsham Street
London SW1P 4DF

 

When you reply it would be very useful if you confirm whether you are replying as an individual or submitting an official response on behalf of an organisation and include:

  • your name,
  • your position (if applicable),
  • the name of organisation (if applicable),
  • an address (including post-code),
  • an email address, and
  • a contact telephone number

We strongly encourage responses via the online survey, particularly from organisations with access to online facilities such as local authorities, representative bodies and businesses. Consultations receive a high-level of interest across many sectors. Using the online survey greatly assists our analysis of the responses, enabling more efficient and effective consideration of the issues raised.

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The consultation period has been extended to   close   on 17 Jan 2024.

 

Your local MP  could   reply to   this  consultation , as  the  Head of  a  Constituency.  

 

Note  for  responders  :     We strongly encourage responses via the online survey, particularly from organisations with access to online facilities such as local authorities, representative bodies and businesses. Consultations receive a high-level of interest across many sectors. Using the online survey greatly assists our analysis of the responses, enabling more efficient and effective consideration of the issues raised.

 

The MPs for Sheffield area include :

 

Gill Furness , MP  for Sheffield Brightside

Paul  Blomfield ,  MP for Sheffield  Central

Olivia Blake , MP for Sheffield Hallam,

Louise  Haigh ,  MP for  Sheffield  Heeley .

Clive  Betts , MP for Sheffield  South East

 

 

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Good post.

NB: this is not associated with the Leasehold and Freehold Bill, currently before Parliament.

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The  "Leasehold and freehold  Reform bill"   is  in House of Commons,   at the Committee Stage  after 1st and 2nd reading.

 

This  consultation on "capping ground rent "  is a separate  subject  from  Mr Gove  and  it is  open to public response  from   freeholders,  leaseholders, management companies , mortgage lenders , property  letting agents and  conveyancing solicitors  , who report on title to a mortgage lender, and to  members of  forum .

 

So  if  you are leaseholder,  then  please  respond  to  the consultation  and  inform  Mr Gove  that   buyers   have paid 100%  to developer  for  their flat  which  includes construction  of their  building , and the  leaseholders  should own their  building with  the gardens  .   But currently,   a  ground rent  company  can  pay    2% -3%   to developer  for   "the  freehold title"   for the    ground  rent   income  (  and  gets the building for free.) .  

 

The Government's mistake is to define "freehold title includes  land  plus the building" and protect the freeholder's interest  by  upholding   unfair laws ,  such as   "forfeiture of lease" for ground rent in arrear and "marriage value"  in statutory lease extension .  It is time for  Mr Gove  to recognise the block of flats  belongs to the flat owners  ,  and   withdraw the  court   rules  on " forfeiture" and "marriage   value etc .

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Here is a   weblink   to  explanation notes  on Leasehold and Freehold Reform Bill  which is passing through Parliament :

 

-  https://publications.parliament.uk/pa/bills/cbill/58-04/0013/en/230013en.pdf

 

Overview of the Bill

 

1 The Leasehold and Freehold Reform Bill is the second part of a legislative package to reform  English and Welsh property law. It follows on from the Leasehold Reform (Ground Rent) Act
2022, which put an end to ground rents for new, qualifying long residential leasehold  properties in England and Wales.

 

2 The Bill will make long-term changes to  homeownership for millions of leaseholders in
England and Wales. The main elements of the Bill are:

 

3 Empowering leaseholders:
a. Making it cheaper and easier for existing leaseholders in houses and flats to extend  their lease or buy their freehold.

 

b. Increasing the standard lease extension term from 90 years to 990 years for both  houses and flats, with ground rent reduced to a peppercorn.

 

c. Removing the requirement for a new leaseholder to have owned their house for two   years before they can extend their lease or buy their freehold and for flats before they can extend their lease.

 

d. Increasing the 25 per cent ‚Äėnon-residential‚Äô limit preventing leaseholders in buildings¬† with a mixture of homes and other uses such as shops and offices, from buying their¬† freehold or taking over management of their buildings - to allow leaseholders in¬† buildings with up to 50 per cent non-residential floorspace to buy their freehold or
take over its management.

 

4 Improving leaseholder consumer rights:

 

a. Requiring greater transparency regarding leaseholders' service charges so that all  leaseholders receive minimum key financial and non-financial information on a
regular basis, including introducing a  standardised service charge demand form and  an annual report, so that leaseholders can scrutinise and better challenge costs if they
are considered unreasonable.

 

b. Replacing buildings insurance commissions for managing agents, landlords and freeholders with transparent administration fees.

 

c. Scrapping the presumption for leaseholders to pay their landlords’ legal costs when  challenging poor practice.

 

d. Granting freehold homeowners on private and mixed tenure estates the same rights¬† of redress as leaseholders ‚Äď by extending equivalent rights to transparency over their¬† estate charges and to challenge the charges they pay by taking a case to a Tribunal.

Edited by topflat29

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Lease extensions and Ground rent

 

12 This Bill introduces a new right to a lease extension for leaseholders of both houses and flats, for a term of 990 years at a peppercorn ground rent on payment of a premium.

 

15 The Bill introduces a new right for leaseholders who already have very long leases (with over  150 years remaining) to buy out their ground rent without extending the term of their lease or buying the freehold.

 

16 The Bill sets the method for calculating the price of a statutory lease extension or freehold  acquisition, known as the valuation process. The Bill removes the requirement for marriage  value to be paid, caps the treatment of ground rents in the valuation calculation at 0.1% of the  freehold value and allows Government to prescribe the rates used to calculate the  enfranchisement premium. Rates will be set by the Secretary of State in secondary
legislation.

 

My comment  on No. 16  :     Removing the marriage value is correct ,  because the building belongs to the leaseholders.

                                                             But treatment of  ground rent at 0.1% of freehold value is not acceptable ,  because the building belongs to  the leaseholders.

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All-Party Parliamentary Group for Leasehold and Commonhold Reform

OPEN CONSULTATION

Modern leasehold: restricting ground rent for existing leases

Deadline: Wednesday 17th January

This consultation by the Department for Levelling Up, Housing & Communities seeks views on capping the maximum ground rent that residential leaseholders can be required to pay in England and Wales.

The MP co-chairs of the All-Party Parliamentary Group, Sir Peter Bottomley, Justin Madders and Daisy Cooper, support the Leasehold Knowledge Partnership, the National Leasehold Campaign and the Leasehold Advisory Service in their submissions to cap residential ground rents at a PEPPERCORN

You may respond to the consultation by completing an online survey here:

https://consult.levellingup.gov.uk/leasehold-reform/38011950/

Alternatively, an email response to specific consultation questions can be sent to: Consultation@levellingup.gov.uk

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