Ground rent reform set for scrapheap

Plans to set ground rents at a ‘peppercorn rate’ are reported to have been dropped amid opposition from freehold campaigners and pension funds.

The Sunday Times reported that Housing Secretary Michael Gove is struggling to get support from the Treasury to push through reforms that would have effectively set ground rents at zero to support leaseholders.

A spokesperson from the National Leasehold Campaign (NLC), said: “We know that thousands of leaseholders have responded to the Government’s ground rent consultation, explaining in their droves why existing ground rents need to be reduced to a peppercorn to avoid the inherent unfairness of a two-tier system now that ground rents are limited to a peppercorn on new build properties.

“It is extremely frustrating that, if the rumours are true, the Treasury and the Prime Minister have been hoodwinked by sector lobbyists who have no regard for the leasehold misery faced by millions of leaseholders across the country. It also seems they are running scared from legal challenges funded by freehold investors with skin in the ground rent game and deep pockets.”

The NLC said retrospective action on ground rents would have no material impact on pension schemes, and those pension schemes that do have ground rent investments should be reassessing them, adding: “No reputable company with a responsible and ethical investment strategy would invest in ground rents if they saw first-hand the misery they cause and the deplorable sales tactics that have led so many leaseholders to have onerous ground rents.

“With a General Election looming, abandoning a manifesto commitment that would help thousands of leaseholders is just pure folly.”