The Leasehold Reform (Ground Rent) Bill is on the verge of becoming law after passing through the Houses of Commons and Lords.
Ground rents will be reduced to a ‘peppercorn’ rate, meaning new leaseholders will no longer be punished with escalating ground rents.
The bill could have been more far-reaching, as a Labour amendment that would have seen ground rents removed from existing leasehold properties was defeated by 306 votes to 162.
Labour MP Mike Amesbury said: “A feudal system of kings and barons needs to be kicked into touch. It is unjust and it is unfair.
“The bill represents the picking of a single apple in the orchard.
“Leasehold is a system hundreds of years old. A 28-page bill is not enough to finish it off, and we do need to finish it off.”
He called for a “clear timetable” for further changes.
Conservative MP Theresa Villers said the amendment “amounts effectively to a confiscation of existing property rights”.
She spoke of the “myriad financial and legal responsibilities and keep up to speed with a rapidly changing and complex regulatory environment” that professional freeholders currently deal with, which would be passed onto leaseholders.
Meanwhile Conservative MP Desmond Swayne said: “for many people in the retirement sector, it will be in their financial interest to pay a lower purchase price and have a continual ground rent, rather than to pay a significantly greater capital sum upfront.”
