Rachel has slammed the “unethical behaviour” of freeholders as she spoke in support of ending the leasehold scandal.
Yesterday (December 11th) saw the Second Reading of the Government’s flagship Leasehold and Freehold Reform Bill which will restore true home ownership to millions, end rip-off charges and introduce fairness to the leasehold market.
The Bill, which Rachel worked on as Housing Minister, will increase the standard lease extension term from 90 years in flats and 50 years in houses to 990 years for both houses and flats, with ground rent reduced to a peppercorn - zero financial value - upon payment of a premium. This will ensure leaseholders can enjoy secure, ground rent-free ownership of their properties for years to come, without the hassle of repeated lease extensions.
It will improve leaseholders’ consumer rights by requiring transparency over service charges using a standardised comparable format so leaseholders can scrutinise and better challenge them if they are unreasonable.
The Government will also replace buildings insurance commissions for managing agents, landlords and freeholders with transparent administration fees, stopping leaseholders from being charged exorbitant commissions on top of their premiums.
As well as that, the Government is consulting on capping ground rents for existing leaseholders to ensure all leaseholders are protected from making payments that require no service or benefit in return. Options under consideration include capping future ground rents at a peppercorn or at a percentage of the property value.
The Government also intends to ban the creation of new leasehold houses so that, other than in exceptional circumstances, every new house in England and Wales will be freehold from the outset.
Rachel said:
“It is this Conservative Government which is ending the scandal of freeholders ripping off leaseholders in Redditch and across the country.
“I was shocked by how leaseholders have been treated and how their lives have been blighted by this scandal which I know as blighted the lives of people in Redditch.
“I’m proud to have worked on this Bill which will restore true home ownership to millions, end rip-off charges and introduce fairness to the leasehold market.
“We got here because of the greed and unethical behaviour of predatory freeholders who have treated leasehold properties as a cash cow and the leaseholders as a milking machine to produce an endless stream of income for no work at all. It is the ultimate definition of rent-seeking behaviour in its worst excesses. It is frankly disgusting, and this Government is putting an end to it once and for all.”