Leasehold Reform (Ground Rent) Bill [Lords] — House of Commons, 2022-01-24
Topic: Housing
Richard James Shannon (Democratic Unionist Party, Right): It is always a pleasure to make a contribution in such debates, and it is nice to be here. When we look at amendment 1 and the reasons why the right hon. Member for New Forest West (Sir Desmond Swayne) tabled it, as he expressed in his contribution, it is hard to say that we should not support it We must make sure that there is financial fairness for leaseholders, especially long leaseholders who plan to hold a lease for more than 21 years. The issue of ground rent payment has been brought to my attention by my constituents, and the hon. Member for Warrington South (Andy Carter) rightly gave an example of his constituents. An elderly couple in my constituency, who paid their mortgage off more than 15 years ago, are still paying ground rent of more than £50 a year. Although that is not much, I am pleased that the need to abolish this has been recognised. We already changed the legislation in Northern Ireland, so I understand why this Minister and Government are looking forward to making these changes tonight. Many Members have stated that many people have long leases with higher ground rents at the start of their lease, with shorter ground rent review periods. As a result, leaseholders face unsustainable ground rents, so there is a real need to change this, as hon. Members have said Leaseholders with high or escalating ground rents will often struggle to remortgage or sell their houses, leaving them in greater financial distress. The Bill aims to restrict ground rents on newly created long residential leases, with some exceptions, to a token of one peppercorn a year. That effectively restricts ground rents to zero financial value. The intention is to make leasehold ownership fair and more affordable for leaseholders. We should support that purpose In Northern Ireland, individuals can apply to the Land Registry to buy out their ground rent. In some cases, the individuals cannot afford to pay the substantial sum outright, so I am pleased that the Bill has assurances for long leaseholders and that Government have protected householders. If ground rent is demanded in contravention of the Bill and any payment received is not returned in 28 days, the landlord will face a fine ranging from £500 to £30,000 per qualifying lease. The fines are clear and hopefully prohibitive However, there is one substantial problem with the Bill, as others have said: it will apply only to new leases and will not assist existing leaseholders faced with high and escalating ground rents. I feel that they should not be left behind and I would be grateful if the Minister clarified this matter, looked at it again and considered the impact that the situation has not only on finance, but the possibility of remortgaging or selling property The Bill’s commencement date has also raised concerns across the House, so I would be grateful if more clarity was given about that. A Bill on broader leasehold reform is expected in the third Session of this Parliament and I would encourage discussion and a closer look at how the situation can be improved to make circumstances easier for leaseholders. Others have said that we just need a wee bit more movement, and perhaps that can be done in the next Session.