Leasehold reforms become law but without ground rent cap

A ground rent is paid by owners of leasehold properties on top of their mortgage, with some facing high charges and unexpected increases which can make homes difficult to sell.

But the owners of freehold properties had campaigned hard against the ground rent cap and other measures in the bill arguing it would harm the value of their investments and some companies have threatened to sue the government for interfering with their property rights.

Labour’s shadow housing minister Matthew Pennycock said his party would “finish the job of finally bringing the archaic and iniquitous leasehold system to an end”.

“Having waited so long and had their expectations raised so high, leaseholders across the country will be bitterly disappointed at the Tories’ failure to enact bold leasehold reform,” he added.

Speaking as the leasehold bill was being rushed through the House of Lords on Friday, Tory peer Lord Bailey of Paddington said: “This bill is suboptimal, it’s not the revolution that many leaseholders across the country have been desperate for.

“But it’s the only game in town, a game that has currently taken 22 years to get to this point.”

Other Tory peers accused the government of “rushing through” the legislation.

The Renters Reform Bill, which was expected to pave the way for an end to section 21 no-fault evictions, has been axed.