min read

Rebel MPs demand ground rents abolished for existing leaseholds


A group of 30 Tory MPs have written to the Chancellor Jeremy Hunt warning they may vote against the Government’s Leasehold and Freehold Reform Bill unless ground rents are abolished for both future and existing leaseholds.

The stand-off follows pressure from ‘big property’ landlords and pension funds who make billions every year from ground rents, which housing secretary has previously described as ‘money for nothing’.

Michael Gove (main pic) originally promised he would scrap ground rents or make them peppercorn but laters said it would be only for new leaseholds.

But a row has now broken out over whether this was a part of the party’s 2019 manifesto or not. It said that the Government would “continue with our reforms to leasehold including implementing our ban on the sale of new leasehold homes, restricting ground rents to a peppercorn, and providing necessary mechanisms of redress for tenants”.

Grave misunderstanding

The rebel MPs are insisting Sunak and Gove stick to this manifesto promise, but the British Property Federation says this is a ‘grave misunderstanding’, arguing that is covered ‘new’ leaseholds and was not a retrospective promise.

Ian Fletcher (pictured), its Director of Policy (Real Estate), says: “There seems to be a grave misunderstanding that the 2019 Conservative Manifesto somehow confirmed a mandate for the party to retrospectively abolish ground rents on leasehold properties.

“This is a view which has been carried over by a group of parliamentarians who are seeking to go beyond the intent and spirit of what that manifesto contained.

“The then Minister, Lord Greenhalgh, clearly stated in a House of Lords debate in 2021 that the Conservative Government’s formal position was not to abolish existing ground rents, due to the material negative impact that would have on pension savers, but only stop new ground rents being created.

“At best, the manifesto commitment is ambiguous, and in light of previous statements certainly does not provide the clear mandate proponents of abolition claim.”

Legislation for landlords: Everything you need to know


Leasehold reform