I am delighted that the Government has finally announced changes to the rules for leaseholders. This has long been a concern of mine, but it has also been a real issue in the local community and for many of my constituents.
Throughout my time as your MP, many of you have been in touch with me about exorbitant ground rents and extra charges, such as for cladding, and this truly has been a scandal. The Government has been slow to act on the issue.
The changes announced yesterday mean that leaseholders can extend their lease to a new standard 990 years with ground rent at zero. What’s more, new a newly-built property will have a 990-year lease with zero ground rent.
The Government has also announced that it will be abolishing prohibitive costs such as ‘marriage value’ and plans on setting calculation rates to ensure a fairer, cheaper and more transparent process.
The process in question means that leaseholders will, unfortunately, still have to pay for the extension. The Government plans to introduce an online calculator which should make it simpler for leaseholders to find out the cost of buying their freehold or extending their lease.
These changes mean that any leaseholder who opts to extend their lease, as they legally can, will bear no further ground rent cost to the freeholder, changes which could mean savings of tens of thousands of pounds for some people.
The terms of this payment are as of yet unclear and I hope that the Government’s process is one that is fair and equitable for people who have been troubled by this scandal.
The Government however, worryingly, made no announcement on the cladding scandal which has seen leaseholders saddled with between tens and hundreds of thousands of pounds in bills to remove the Grenfell-style cladding – something the property developer installed and should therefore be responsible for.
It is estimated that 1.5 million flats are currently un-mortgageable, which has trapped around 3.6 million people in potentially unsellable and tragically dangerous housing. We cannot allow another Grenfell style disaster to go ahead and the Government must take responsibility by providing the necessary resources to rescue these victims of the cladding costs scandal.
In a statement, the Government clarified that a response to the recommendations put forward by the Law Commission, including matters such as commonhold, will be produced in due course. I hope that when these recommendations are addressed, it will also look at the issues the cladding crisis has caused.
The Government is also establishing a Commonhold Council, a partnership of leasehold groups, industry and government, which will prepare homeowners and the market for the widespread take-up of commonhold. Until then, I will continue to work to ensure the rights of leaseholders are understood in Parliament and beyond. There is still a significant amount of work to do to resolve the multitude issues around leasehold properties.