"A former minister has warned the prime minister could face a "mass rebellion" if the government waters down promised reforms of the leasehold system in England and Wales. Justin Madders told the BBC Labour must stick to its pledge to cap ground rents - an annual fee leaseholders must pay to their freeholder. Labour's election manifesto promised "to tackle unregulated and unaffordable ground rent charges" but there are concerns the government may row back on a cap because of the potential impact on pension funds."
"There are around five million leasehold homes, where people own the right to occupy the property via a lease for a certain number of years from a freeholder. Ground rents - which can often be hundreds of pounds a year - were abolished for most new residential leasehold properties in England and Wales in 2022 but they remain for existing leasehold homes. It is common for a lease to include a clause that the ground rent increases by a certain percentage"
A warning has been issued that weakening promised leasehold reforms could provoke a mass rebellion. Labour pledged to cap ground rents to tackle unregulated and unaffordable charges, but concerns exist that a strict cap could affect pension funds. The government says it will legislate and will publish further details after a delayed draft bill. Around five million leasehold homes remain subject to ground rents; most new leases were exempted in 2022 but existing leases still carry charges. Lease clauses that increase rents by set percentages or RPI can hinder sales and mortgage lending. Reports indicate divisions over the level of any cap.
Read at www.bbc.com
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