Conservative MPs threaten rebellion over government’s housing proposals
A group of over 30 Tory MPs have written a letter to Chancellor Jeremy Hunt expressing their dissatisfaction with the current leasehold system and urging the government to scrap ground rent on leasehold properties. The letter comes as the government faces pressure from within its own party to reform the system and fulfill promises made in the Tory 2019 manifesto.
Currently, there is no cap on the amount freeholders can charge existing leaseholders for ground rent, which has been described by Housing Secretary Michael Gove as “a charge for nothing.” The MPs who have signed the letter are in favor of moving towards a “peppercorn” system, where ground rent is as close to zero as possible. They argue that this reform is crucial to upholding Tory aspirations of creating a “property owning democracy.”
The letter also highlights the financial burden that the current leasehold system places on constituents, with many struggling to afford the cost of living. The MPs state that they have witnessed the “human misery and financial stress” caused by the “feudal” system of leaseholding and believe that it is time to finish what Margaret Thatcher started and implement much-needed reforms.
The housing secretary has previously described leasehold as a “feudal system” and there have been repeated promises by former government ministers to scrap the system altogether. This sentiment is echoed in exclusive polling seen by Sky News, which shows that scrapping leaseholds is a popular policy among UK voters, with the majority wanting to see them gone altogether. Among Tory voters, the number is even higher at 65%.
Despite reports that pension funds stand to lose the most from reforming the policy, the strongest support for scrapping leaseholds comes from voters over 65 years of age. This issue has caused significant concern for homeowners, who feel trapped in a system that gives them little say.
One such homeowner is Claire, who bought her flat in Greenwich ten years ago. She saved up early to get onto the property ladder and invested all of her savings in a starter property. However, she now feels trapped in a property nightmare, unable to sell her flat and facing a threefold increase in service charges, which now amount to over £6,000 per year.
David, who also lives in the same block of flats as Claire, is struggling to cope with the financial burden of leasehold charges. He has had to give up on holidays and significantly cut back on expenses. He expresses frustration over the lack of control he has in the situation, stating, “I should be in the stage of my life where I should be able to afford really nice things, but I can’t because I have to keep paying the charges over and over again.”
The government has stated that their new legislation aims to restrict the sale of new leasehold homes but does not address the sale of new flats, which make up around 70% of affected properties. This leaves little in the way of reform for current leaseholders, estimated to number around five million in the UK.
The Department for Levelling Up, Housing and Communities has recently consulted on options for ground rent charges and is considering responses. The current bill also aims to extend the default length of a lease and make it cheaper for people to convert properties into freeholds. However, senior Conservative MP and former housing minister Robert Jenrick believes that these options are not robust enough and calls for the leasehold system to be scrapped altogether, stating, “It’s not fair, it’s not right, and it’s an affront to the Conservative dream of homeownership.”
Campaign group Free Leaseholders founder Harry Scoffin also urges the Conservative Party to fulfill their manifesto promise of restricting ground rents to a peppercorn, stating, “The Conservative Party has a clear choice: it is on the side of young homeowners and aspiring first-time buyers, or rent-seekers, extortionists, and middlemen? Rishi Sunak must hold his nerve and stand up for the little guy.”
In response to the pressure from within their own party, a government spokesperson stated, “It is not fair that many leaseholders face unregulated ground rents for no guaranteed service in return, and we remain committed to reducing ground rents to a peppercorn as set out in our 2019 manifesto. We recently consulted on a range of options to cap ground rents for existing residential leases, and we are carefully considering the responses before we make an announcement in due course.”
