Ground rents to be banned on new leases from 30 June - news story

MSE_Kit

Ground rent is to be scrapped on new leases in England and Wales from 30 June when the Leasehold Reform (Ground Rent) Act takes force, the Government announced today (22 April). From this point, ground rent on new leases will never be more than a 'peppercorn' amount – in other words zero –  resulting in a potential saving of £100s a year for future homeowners and some existing leaseholders. 

Read the full story here:

Ground rents to be banned on new leases from 30 June saving homeowners £100s/yr

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Slithery

MSE_Kit said:

From this point, ground rent on new leases will never be more than a 'peppercorn' amount – in other words zero

Peppercorns aren't free...
https://www.tesco.com/groceries/en-GB/products/256150815
The freeholder is perfectly within their rights to collect them if they wish.

GDB2222

Slithery said:

MSE_Kit said:

From this point, ground rent on new leases will never be more than a 'peppercorn' amount – in other words zero

Peppercorns aren't free...
https://www.tesco.com/groceries/en-GB/products/256150815
The freeholder is perfectly within their rights to collect them if they wish.

I was surprised how much the quality of the pepper varies between different supermarkets. This is one area where I prefer to pay more to get a premium product.

GDB2222

Incidentally, as we are talking about ground rents, do you have to grind the peppercorn before handing it over?

Slithery

GDB2222 said:

Incidentally, as we are talking about ground rents, do you have to grind the peppercorn before handing it over?

Badum-tiss.

[Deleted User]

This is good news but still leaves a lot of people stuck paying it.

Sarah1Mitty2

Yes, great news, but a lot of people still on old contracts?

user1977

Sarah1Mitty2 said:

Yes, great news, but a lot of people still on old contracts?

Like it says in the article:

" A second bill, which is intended to make it easier and cheaper for existing leaseholders to extend a lease, is still at the consultation stage with no implementation date yet to be set. "

spilling

What about those of us in new builds apts with existing ground rent terms still in place? How will we sell?…Not forgetting that we are trapped from selling anyway due to the Cladding Scandal and liable to pay bills for cladding & non cladding costs between £10-£200k+! Especially any investing in BTL for pension, under11m in height & RTM.  Press saying Developers paying but up to 85% of leaseholders do not qualify at all. Bankruptcy looming and lives in tatters. 

Sarah1Mitty2

spilling said:

What about those of us in new builds apts with existing ground rent terms still in place? How will we sell?…Not forgetting that we are trapped from selling anyway due to the Cladding Scandal and liable to pay bills for cladding & non cladding costs between £10-£200k+! Especially any investing in BTL for pension, under11m in height & RTM.  Press saying Developers paying but up to 85% of leaseholders do not qualify at all. Bankruptcy looming and lives in tatters. 

Why especially BTL?

saajan_12

The Leasehold Reform (Ground Rent) Act is the first of two bills the Government is working on, with this one primarily benefitting future leasehold homeowners. A second bill, which is intended to make it easier and cheaper for existing leaseholders to extend a lease, is still at the consultation stage with no implementation date yet to be set. 

Unfortunately this staggered approach will make it even harder for existing leasholders to sell, as they'll be compared to new leases on £0 ground rent.

Better first step would have been to repeal the AST treatment and repossession rights for leases over £250/£1000 annual rent for everyone.