The UK government, led by Keir Starmer, has submitted a bill setting a ceiling on ground rent under existing leasehold agreements for tenants in England and Wales. The initiative, long anticipated by tenant rights groups, has already faced the threat of lawsuits from landowners and criticism for the slow pace of reforms.
As part of the package of measures, the key was to limit land rents to a symbolic amount of 250 pounds per year. After 40 years of payments, it should be reduced to a symbolic amount (1 euro).
In addition, the sale of new apartments in the leasehold format will be discontinued. And the owners will make it easier to switch to the commonhold format, which does not provide for ground rent.
Buying property in the UK often means that you will own an apartment, but not the land under the house. The land belongs to another person or company, the freeholder. For the fact that your house stands on his land, you pay him ground rent every year. The amount may be small, or it may be very high (hundreds of pounds per year), and it tends to increase.
Housing Minister Steve Reed said the reform would help millions of people gain control of their homes. His colleague, Matthew Pennycook, stressed the government's willingness to "stand up to vested interests opposed to change."
Angela Rayner, the deputy leader of the Labor Party, an ardent supporter of the reform, warned that landowners could again "resort to legal tricks" to block the changes. She also noted that "outrageous statements" are already being made that the reform will affect critical work to ensure building safety. The National Company for Tenants' Rights (NLC) welcomed the restriction, but expressed disappointment at the decision not to introduce a nominal fee immediately. "40 years is an incredibly long waiting time," NLC co-founder Joe Darbyshire said, calling ground rent "a fee for a service that is not provided."Industry representatives agree with the goals of the reform, but criticize the speed of their implementation. Linz Darlington from Homehold noted that it is still "a long time" before the law is passed, and the pace of change is "extremely slow." He recalled that most of the 2024 Rental Reform Law has not yet been implemented.
The Residential Freehold Association called the restriction an "unjustified interference with property rights" that could undermine investor confidence and lead to the departure of professional owners, shifting their security responsibilities to tenants. The bill also expands the rights of residents in buildings with shared ownership. However, experts warn of the risks of residents' full responsibility for management, citing examples of fire safety problems. He advocates a mixed model where residents make decisions and professional managers provide security.Source: The Guardian
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